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Payroll Controls Audit Program

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Payroll Controls Audit Program Powered By Docstoc
					XXX COMPANY

PAYROLL CONTROLS TEST PROGRAMME
File Reference ______________ Initial Prepared YEAR TO XXX Reviewed Date

BODY _________________________________________

SYSTEM: PAYROLL

Notes

The programme should be completed by audit staff recording    their initials and the date the test was carried out a summary of the test results whether or not substantive tests are required

Objective 1:Payments are made only to valid employees.

W/P Ref. 1.1a Obtain sight of the procedural instructions and confirm from discussion and observation that they have been issued to relevant staff. 1.1b Review the procedural instructions and confirm that they broadly cover adequately the processes and controls expected for the system 1.2 Select a sample of __ new starts and ensure there is evidence that each has been checked to the approved staffing establishment. 1.3 Confirm by observation and enquiry that segregation of duties precludes a member of staff being involved in both recruitment and payroll functions (or precludes staff from either section having access to the other’s records or systems). 1.4 Examine the last payroll or employee listing which was checked by departments and confirm that it evidences that the validity of the listed employees was checked. 1.6 Select a sample of ___ new starts from payroll output and confirm that a properly authorised notification of appointment was received. 1.7a Obtain sight of the authorised signatory list for new start appointment and confirm from discussion and observation that it is available to relevant staff. 1.7b Review the authorised signatory list and confirm that it appears up to date.

Init/ Date

Test Results

W/P Ref. 1.8 Select a sample of ___ bank detail amendments from payroll output. Ensure that written notifications were received and that the payroll change matches the notification. 1.9 Select a sample of ___ leavers and ensure there is evidence that pay staff/employing departments confirmed their timeous removal from the payroll. 1.10 Select a sample of ___ new starts /leavers and ensure there is evidence that each has been checked to authorised source documents by officers independent of processing staff. 1.11a Examine the computer application documentation which identifies the nature of events and circumstances which will be rejected on input or highlighted in exception reports and confirm that these are adequate. 1.11b Confirm by examining a sample of ___ exception reports that these evidence that they have been timeously followed up and that action has been taken where appropriate. 1.12 Confirm by observation and enquiry that segregation of duties precludes a member of staff being involved in both payroll processing and distributing pays (cash/cheque) – may not be applicable if no manual payments.

Init/ Date

Test Results

Objective 2:

All data input to the system is properly authorised.

W/P Ref. 2.1 Obtain a listing of the access and authorisation rights of relevant staff from the system administrator and review for appropriateness. 2.2a If the system does not ‘force’ regular password changes, confirm from discussion with staff that their passwords are changed in accordance with the frequencies previously advised. 2.2b Confirm by observation and enquiry that staff do not  write their passwords on notes attached to their workstation  leave a ‘live’ terminal unattended  disclose a password to, or share passwords with, colleagues 2.3a Obtain sight of the payroll amendment authorised signatory list and confirm from discussion and observation that it is available to relevant staff. 2.3b Review the authorised signatory list and confirm that it appears up to date. 2.4 Select a sample of ___ changes and ensure there is evidence that each has been checked to authorised source documents by officers independent of those processing input.

Init/ Date

Test Results

Objective 3:

Data (particularly standing data) is accurate and complete.

W/P Ref. 3.1 Examine the last payroll or employee listing which was checked and confirm that it evidences that the validity of the listed employees and their standing data was checked by the responsible manager. 3.2a Examine documented house-keeping procedures for maintaining security copies and confirm these are adequate. 3.3b Ensure house-keeping procedures provide for the media-safe storage of back-up tapes both on the premises and at an off-site location. 3.3c Examine the latest copy of the back-up tape and confirm that file generation details are accurately recorded on the label and agree with the file library records. 3.4 Confirm there are up to date contingency plans and that there is evidence that users would be able to handle ongoing transactions pending the restoration of a failed system.

Init/ Date

Test Results

Objective 4:

Payments are correctly calculated in accordance with contracts of employment, pay scales, hours worked, other authorised allowances etc.

W/P Ref. 4.1 Examine the last payroll or employee listing which was checked and confirm that it evidences that the validity of the listed employees and their standing data was checked. 4.2 Confirm from written instructions (or enquiry) that appropriate staff have been instructed to question possible anomalies or inconsistencies in pay notifications. 4.3 Examine the evidence of the procedures and controls in place which ensure that increases in salaries/wages, following national settlements or increment dates, are correctly effected. 4.4 Select a sample of ___payments to non-salaried employees and ensure there is evidence that signed and authorised timesheets (or equivalent) were received.

Init/ Date

Test Results

Objective 5: Payroll costs are correctly recorded in the financial ledger.

W/P Ref. 5.1 Examine the evidence that budgetary control procedures provide a reasonableness check over the accuracy of employee costs 5.2 Select a sample of ___ new starts/ transfers and confirm there is evidence that ledger codes were independently checked prior to processing. 5.3 Select a sample of ___ new starts/transfers and confirm there is evidence that output checks ensure that the codes supplied by departments were correctly input at the pay processing stage. 5.4a Examine the computer application documentation which identifies events which will be highlighted in exception reports and confirm that these include identifying invalid ledger codes. 5.4b Select a sample of ___ exception reports and confirm there is evidence that they have been timeously followed up and that action has been taken, where appropriate. 5.5 Confirm there is evidence that payroll suspense accounts are regularly reconciled, scrutinised and cleared.

Init/ Date

Test Results


				
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