As an internal auditor, you have been assigned to evaluate the controls and operation of a...

What would be transactions in a payroll system?

What is this audit technique called?

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Expert Solution

Payroll is the process by which employers pay an employee for the work they have completed. Any business with employees should have a payroll management process established. An effective and efficient payroll process ensures that employees are paid accurately and consistently and gives HR the chance to focus on other aspects of their job.Payroll systems manage everything having to do with the process of paying employees and filing employment taxes. They are put in place to keep track of worked hours, calculating wages, withholding taxes and other deductions, printing and delivering checks and paying government employment taxes. A payroll management system is a software program designed to organize all the tasks of employee payment and tax filing. These tasks include keeping track of hours, calculating wages, tracking attendance, withholding taxes and deductions, printing and delivering checks, completing direct deposits, paying premiums to insurance carriers, and/or paying employment taxes to the government.

Investing in payroll software can save labor dollars, eliminate errors, and avoid compliance issues. Processes can be completed in a fraction of the time, which frees employees up for activities that are more conducive to generating revenue. Payroll software also makes it easier for a company to adapt and take on more employees as it grows.

Transactions may be related to wages, employment taxes,Tracking of hours, attendance , premiums to insurance carriers.

Answer-2 This audit technique is test of controls. It is experience in planning computer audits and in using modern computer assisted auditing tools and techniques (CAATTs).

Advantages of this technique are:-

· Does not require extensive programming knowledge

· Approach and results are easy to understand.

· The complete system may be reviewed.

· Results are often easily checked.

· An opinion may be formed as to the system's data processing accuracy.

· A regular computer program may be used.

· It may save time.

· The auditor gains experience.

· The auditor maintains control over the test.

Invalid data can be submitted to test for rejections.

Disadvantages are:-

· Impractical to test all error possibilities.

· May be unable to relate input data to output reports in a complex system.

· If independent files are not used, it may be difficult to reverse or back out test data.

Preparation of satisfactory test transactions may be time consuming

ekkarill92 answered 1 year ago

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