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Internal Audit Department Audit Program for Payroll The scope and purpose of the audit is to gain comfort over the control and transactions surrounding compensation and benefits. Audit Procedures Done by Date Workpaper 1. Obtain the July Payroll registers for domestic employees and make a selection of 10% of the employees by selecting every 10th employee. For the employees selected, obtain all of the detail pay slips for every payroll from January through July, excluding any expense pays and test the following: a. Regular monthly salary to the signed PCN form and/or offer letter. Calculate any partial pay amounts for a new hire starting throughout the month or leaves and determine that the calculation is consistent with the policy. b. Bonus amount to the signed PCN form. c. Verify enrollment in the 401k plan and if enrolled, recalculate the 401k % based on review of the employee signed 401k form noting the selected % listed. d. Verify enrollment in the pre-tax bus or parking plans to the singed enrollment forms. e. Recalculate the social security and medicare tax amounts based on %’s provided by the tax team. f. Verify enrollment in the ESPP plan and if enrolled, recalculate the ESPP % based on review of the employee signed ESPP form noting the selected % listed. If the employee withdrew from the ESPP plan, agree to the signed withdrawal form and test the amount refunded to the employee. g. Test any other pay amounts, pre-tax or after-tax deductions not listed above. h. Recalculate net pay for the same month in which the net pay was agreed to the payroll register i. Agree the total per the payroll register for January through July to the entry made by the controllers group for that month. 2. Obtain the July payroll registers for International employees and make a selection of 10% of the employees by selecting every 10th employee. For the employees selected, obtain all of the detail pay slips for every payroll from January through July, excluding any expense pays and test the following: a. all of the applicable steps discussed in 1 above b. as well as any other deductions or taxes that can be calculated or agreed to a supporting document. 3. Obtain the terminated employee list from the Financial Planning & Analysis team and make a selection of 10% of the terminated employees. a. For involuntary terminations, review the signed termination agreement and test any severance amounts that were paid. b. Test the partial pay calculation for employees leaving during the month and ensure that they were not paid in the following month. 4. For all employees selected for testing in 1 through 3 above, agree them to the official July Headcount list published by the Financial Planning & Analysis team. 5. Ensure adequate segregation of duty exits and proper security and backup of the payroll system is maintained
"Payroll Audit Program"