CAT / FIA FAU Syllabus C. Internal Control - Payroll - Notes 3 / 9
The control objectives for the payroll cycle are:
as follows:
Only work done is paid for
Pay is accurately calculated
Pay is correctly made
Pay is authorised
Deductions are correctly calculated and paid
Tests of Control - Payroll Cycle
These will potentially include:
A sample of wages and salaries should be re-performed
The calculation will agree with authorised pay rates and timesheets
Test sample of timesheets for authorisation (esp. overtime)
Attend a cash pay out looking for two people present & one wage per person
Review wages reconciliation and ensure done regularly
Ensure changes to payroll are authorised
Check reasonableness of payroll deductions and ensure authorised
Test controls over unclaimed wages
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