Payroll Audit Program - Excel

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Payroll Audit Program - Excel Powered By Docstoc
					This is the AuditNet Standard Risk Control Audit Matix which incorporates formats
used by many audit organizations in their documentation working papers. There are
format templates for risk control, audit procedures, questionnaires and checklists.
There is a blank workpaper and a report summary that can in used by audit
organizations. AuditNet has prepared a monograph for guidance on preparing and
developing audit work programs, checklists, questionnaires and matrices. The
monograph is available to AuditNet subscribers. For more information go to
www.auditnet.org
Audit Program Area: Payroll

                                         AUDIT PROCEDURES                                        WP Ref


        I. Introduction

          This audit program is designed to test payroll and personnel processes and
          operations, as well as various earnings and deductions calculations, various tax
          compliance requirements and accounting for payroll transactions to ensure adequate
          internal controls and compliance with federal/state regulations.


        II. Scope and Objectives

          The audit will consist of payroll and personnel transactions focused on the period
          from XX/XX/20XX to XX/XX/20XX (minimally a six-month period)


          The objectives of the audit are:
          1. To ensure that the payroll processes and operations are in place and functioning
          properly.


          2. To ensure that the calculations of earnings, special payments, employee benefits,
          employee taxes and voluntary/involuntary deductions are accurate, complete and
          performed in a timely manner.


          3. To ensure that employment taxes, tax and non-tax reporting requirements are in
          compliance with applicable federal/state laws.


          4. To ensure that accounting for payroll transactions are properly classified,
          reconciled and posted to the general ledger.


       III. Review Guidelines

          The audit will be conducted in accordance with company policies and procedures
          and applicable federal/state laws.


       IV Review Criteria

          1. Company Policies and Procedures.
          2. Federal and State Regulations
V. Testing



   To ensure that payroll and personnel process and operations are in place and
   functioning properly.


   a. Review payroll and personnel duties and responsibilities to ensure that there are
   proper separations of incompatible duties.

   b. Review Summary sheet process

   c. Review New Hire Process
      1. Obtain listing of new hires and verify that all forms pertaining to payroll were
   submitted and completed in a timely manner.

   d. Review Termination of Employee process
     1. Obtain listing of terminated employees and final pay to ensure payment was
     properly calculated (i.e. computer loans).


   e. Obtain and verify that reports are utilized to help monitor payroll transactions (i.e.
   budget to actual payroll expenses, error/audit reports, etc.).



   f. Verify that only authorized access to Payroll programs and data are drafted.

      1. Access to personnel files is restricted.

      2. Access to payroll files is restricted.

      3. Access to JDE program is restricted

   g. Verify that payroll is backed up and disaster recovery plan is in place.

   h. Review prior audit findings. Follow up if necessary.

   i. Review employee changes to ensure changes were accurate and made in a timely
   manner.


   j. Review policies and procedures to ensure proper internal controls are in place.




   To ensure that calculations of earnings, special payments, employee benefits,
   employee taxes and voluntary/involuntary deductions are properly calculated.
a. Earnings Calculations
   1. Randomly select one pay period in 20XX. Obtain the payroll register for selected
pay period and randomly select a sample of the employees. Vouch employees' pay
to employees' personnel file to ensure that employees' payment have been made in
the proper amount.


b. Special Payments Calculations
  1. Obtain listing of all employees who received special payments (i.e. bonuses, out
  of cycle payments, etc.).

 2. Select a sample of employees to test based on auditors' judgment and to vouch
 to supporting documentation to ensure payment agreed.


C. Employee Benefits
   1. 401k- Select a sample of employees and verify that the correct percentage of
income is being deducted from their pre-tax income.

   2. Medical and Dental- Select a sample of employees and verify that the correct
amount is being deducted from their pre-tax income for the medical and dental plan
that they elected to use.

   3. Other-Test other employee benefits to ensure calculations are complete and
accurate (long term disability, short term disability, etc.).

d. Employee Taxes
   1. Select a sample of employees and verify that the employees' tax is correct
comparing the employees' W-4 and appropriate federal/state tax bracket with
employees' tax withholdings.

e. Voluntary/Involuntary Deductions
   1. Select a sample of employees who have voluntary/involuntary deductions and
vouch to employees personnel file to appropriate deduction support.

f. Paid Time Off (PTO)
   1. Select a sample of employees and verify that employees are accruing correct
   amount of PTO based on employees' length of service.

 2. Ensure that carryover PTO does not exceed limit (i.e. vacation, personal, sick
 days)

To ensure that employment taxes, tax and non-tax reporting requirements are
in compliance with applicable federal/state laws.



a. Employment Taxes and Tax Reporting Requirements
    1. Obtain a listing of all federal/state filings for realty company for
employment/unemployment, social security, and Medicare. Review filings to ensure
filings are accurate, complete and filed within due dates or have been appropriately
extended for filing purposes.

  2. Obtain a listing of all employees over the Social Security limit ($CY max) to
ensure that the social security tax cuts off at the appropriate limit.

b. Non-tax Reporting Requirements
   1. Obtain a listing of all new hires in CY and randomly select a sample ( of total
population) based on auditors' judgment. Test the following.

        a. New hires were reported to appropriate agencies within required time.

        b. New hires completed the required I-9 form within three days of hire.

        c. W-4 was completed.


To ensure that accounting for payroll transactions are properly classified,
reconciled and posted to the general ledger.


a. Obtain all Form 941's filed for CY and reconcile to salary expense per general
ledger for CY to ensure that federal filings agree with payroll amounts on financial
statements.

b. Obtain payroll reconciliation's and randomly select two or three payroll
reconciliation's to ensure reconciliation's were completed accurately, in a timely
manner and that adjustments have proper documentation.

c. Obtain one-payroll summary for a selected pay period and review postings to the
general ledger to ensure that summaries were posted to the g/l completely and
accurately.


Auditor(s):


Approved by:


Date:
Auditor    Time      Date     Date           Checked
Initials   Spent   Expected Finished Remarks   By:
                              Client Name
                      Internal Control Framework

          Date Completed:
          Completed By:
          Reviewed By:

          Question                                                  Yes No* Comments /Description




              To the best of my knowledge, the answers and comments noted above are accu



          Name and Title of Person Completing Form (please print)                            Name and Title of Department Dire


* For a “No” answer, cross-reference to either a compensating control or to audit work which has been performed
or is to be performed.                            Questionnaire
                   Signature of Person Completing Form                                                Signature of Department


                            7/27/2012
                          Date Form Completed                                                     Date of Department Directo




* For a “No” answer, cross-reference to either a compensating control or to audit work which has been performed
or is to be performed.                            Questionnaire
                           Employee Responsible for Task




s noted above are accurate and reflect the current



Name and Title of Department Director (please print)


            * For a “No” answer, cross-reference to either a compensating control or to audit work which has been performed
            or is to be performed.                            Questionnaire
   Signature of Department Director



Date of Department Director's Signature




      * For a “No” answer, cross-reference to either a compensating control or to audit work which has been performed
      or is to be performed.                            Questionnaire
Finding Ref #   Control Testing   Finding
Management Response & Treatment

				
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