An auditor is performing a preliminary assessment of a large client’s internal controls over payroll. The auditor would identify which of the following as an improper segregation of duties related to the payroll functions?

The following questions concern auditor responsibilities related to the audit of the payroll and personnel cycle. Choose the best response.
a. In auditing the payroll function of a client, an auditor would least likely
(1) verify proper segregation of duties.
(2) request specific management representations related to payroll.
(3) recalculate year-end payroll accruals.
(4) apply analytical procedures.
b. An auditor most likely would introduce test data into a computerized payroll system
to test internal controls related to the
(1) existence of unclaimed payroll checks held by supervisors.
(2) early cashing of payroll checks by employees.
(3) proper approval of overtime by supervisors.
(4) discovery of invalid employee I.D. numbers.
c. An auditor is performing a preliminary assessment of a large client’s internal controls over payroll. The auditor would identify which of the following as an improper segregation of duties related to the payroll functions?
(1) Each employee’s weekly time record must be approved by the immediate
supervisor.
(2) While the majority of the payroll checks are direct deposits, all manual checks
are handed out on a weekly basis by the paymaster.
(3) All blank checks and the check signature plate are maintained by human
resources.
(4) The payroll department calculates the weekly salary distribution based on infor-
mation received, and prepares unsigned checks, which are forwarded to the trea-
surer for approval.

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