During a Payroll Audit of a Large Organization, an Internal

question 207

Multiple Choice

During a payroll audit of a large organization, an internal auditor noted that the assistant personnel director is responsible for many aspects of the computerized payroll system, including adding new employees in the system; entering direct-deposit information for employees; approving and entering all payroll changes; and providing training for system users. After discussions with the director of personnel, the auditor concluded that the director was not comfortable dealing with information technology issues and felt obliged to support all actions taken by the assistant director. The auditor should:

• A) Continue to follow the engagement program because the engagement scope and objectives have already been discussed with management.
• B) Review the engagement program to ensure testing of direct deposits to employee bank accounts is adequately covered.
• C) Recommend to the chief audit executive that a fraud investigation be started.
• D) Test a sample of payroll changes to ensure that they were approved by the assistant director before being processed.

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Definitions:

Reconstruction

The period after the Civil War (1865-1877) in the United States when the southern states were reorganized and reintegrated into the Union.

1873 Depression

A severe economic downturn that began in 1873, known as the Long Depression, characterized by widespread bank failures, unemployment, and a slowdown in industrial production.

North's Resolve

Refers to the determination and steadfastness of the Northern states during the American Civil War in their commitment to restore the Union and end slavery.

South's Farmers

Refers to agricultural laborers and farm owners in the southern United States, historically known for crops like cotton and tobacco.