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Hello Kim,
One of the procedure given for fraud investigation of fictitious employees being set up on a payroll system is:- “Using CAAT’s, identify employees who have not taken any annual leave entitlement or sick leave”.
I was confused how this procedure will be helpful for the auditor and what will this procedure imply with respect to the investigation.?
You don’t say what is the source of the statement so I cannot answer in a specific context.
I would say that if a ghost employee has been set up on a payroll the ghost employee is not going to be submitting holiday requests for approval by a line manager (say) and that might be filed with HR. Similarly, they are not going to be taking sick leave and submitting medical certificates to support their absence.
An organisation may not have hundreds but thousands (or tens of thousands or more …) employees. Using audit software to interrogate a payroll it would be possible to filter through all the monthly payslips for a period and identify employees who have not taken any entitlements for further investigation (e.g. confirming they have an employee record in HR and identifying them in person).
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