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Dear Tutor,
in this uestion we are asked to describe procedures which should be undertaken during the audit of wages as a result of the manager’s assessment of the increased risk of fraud.
could you please help me if the procedures below would be acceptable:
– Compare this year payroll costs with previous year’s costs and inspect if the differences arosen are due to fraud.
– Select a sample of payroll payments and ensure that the bank accounts relate to the employees and not to the payroll clerk.
– Obtain from HR dpt. all new additions and compare new additions in the payroll system to ensure there are no other discrepancies.Best,
Hi, those would be quite good. Be a little more precise if you can. For example:
Compare this year payroll costs with previous year’s costs and inspect if the differences arisen are due to fraud.
There will be many differences as employees join and leave and have pay rises.
Try: Compare this year payroll costs with previous year’s costs and use proof in total to see if differences can be mostly accounted for (Last year’s payroll x increase in number of employees x increase in wages should be close to this year’s payroll).
Your second point is good, but ideally you could use computer assisted auditing to lookat all employees’ bank account numbers.
Your third point is exactly right.
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