This study source was downloaded by 100000834766791 from CourseHero com on 03 02 2022 03 06 33 GMT 06 00 https www coursehero com file 7277111 TBCH13 Tests of Controls and Substantive Tests of Personnel and CHAPTER 13MULTIPLE CHOICEc1 An auditor will ordinarily determine whether payroll checks are properly endorsed during the testing ofa Time cards b The voucher system c Cash in bank d Accrued payroll AICPA ADAPTED a2 Which of the following control procedures could best prevent direct labor from being charged to manufacturing overhead a Comparison of daily journal entries with factory labor summary b Examination of routing tickets from finished goods on delivery c Reconciliation of work in process inventory with cost records d Recomputation of direct labor based on inspection of time cards AICPA ADAPTED b3 For appropriate segregation of duties journalizing and posting summary payroll transactions should be assigned toa The treasurer s department b General accounting c Payroll accounting d The timekeeping department AICPA ADAPTED d4 The proper use of prenumbered termination notice forms by the payroll department should provide assurance that alla Uncashed payroll checks were issued to employees who have not been terminated b Personnel files are kept up to date c Employees who have not been terminated receive their payroll checks d Terminated employees are removed from the payroll AICPA ADAPTED c5 Hitech Inc has changed from a conventional to a computerized payroll clock card system Factory employees now record time in and out with magnetic cards and the computer system automatically updates all payroll records Because of this change a The auditor must audit through the computer b Internal control has improved c Part of the audit trail has been lost d The potential for payroll related fraud has been diminished AICPA ADAPTED a6 In the weekly computer run to prepare payroll checks a check was printed for an employee who had been terminated the previous week Which of the following control procedures if properly utilized would have been most effective in preventing the error or assuring prompt detection a A control total for hours worked prepared from time cards collected by the timekeeping department b Requiring the treasurer s office to account for the numbers of the prenumbered checks issued to the computer department for the processing of the payroll c Use of a check digit for employee numbers d Use of a header label for the payroll input sheet AICPA ADAPTED 91 This study source was downloaded by 100000834766791 from CourseHero com on 03 02 2022 03 06 33 GMT 06 00 https www coursehero com file 7277111 TBCH13 Tests of Controls and Substantive Tests of Personnel and c7 To minimize the opportunities for fraud unclaimed cash payroll should bea Deposited in a safe deposit box b Held by the payroll custodian c Deposited in a special bank account d Held by the controller AICPA ADAPTED d8 A large retail enterprise has established a policy that requires that the paymaster deliver all unclaimed payroll checks to the internal auditing department at the end of each payroll distribution day This policy was most likely adopted in order toa Assure that employees who were absent on a payroll distribution day are not paid for that day b Prevent the paymaster from cashing checks that are unclaimed for several weeks c Prevent a bona fide employee s check from being claimed by another employee d Detect any fictitious employee who may have been placed on the payroll AICPA ADAPTED a9 In the audit of the following types of profit oriented enterprises which one would the auditor be most likely to place special emphasis on testing the internal controls over proper classification of payroll transactions a A manufacturing organization b A retailing organization c A wholesaling organization d A service organization AICPA ADAPTED d10 A common audit procedure in the audit of payroll transactions involves tracing selected items from the payroll journal to employee time cards that have been approved by supervisory personnel This procedure is designed to provide evidence in support of the audit proposition thata Only bona fide employees worked and their pay was properly computed b Jobs on which employees worked were charged with the appropriate labor cost c Internal controls relating to payroll disbursements are operating effectively d All employees worked the number of hours for which their pay was computed AICPA ADAPTED a11 Which of the following procedures is most effective in providing reasonable assurance that payroll checks are distributed only to bona fide employees a An employee independent of payroll preparation compares endorsements on canceled payroll checks with employee signatures in personnel records b All changes in pay rates and deductions are reviewed and approved by a responsible official independent of payroll preparation and distribution c All unclaimed paychecks are returned to an employee independent of payroll preparation and distribution d All personnel and payroll records and documents are prenumbered and physically protected from unauthorized access d12 Personnel department responsibilities should be separated from payroll preparation toa Separate the custody of assets from the recording function b Establish clear lines of authority and accountability c Separate the authorization of transactions from the recording function d Separate the authorization of transactions from the execution of transactions 92 This study source was downloaded by 100000834766791 from CourseHero com on 03 02 2022 03 06 33 GMT 06 00 https www coursehero com file 7277111 TBCH13 Tests of Controls and Substantive Tests of Personnel and d13 For internal control purposes which of the following individuals should preferably be responsible for the distribution of payroll checks a Bookkeeper b Payroll clerk c Cashier d Receptionist AICPA ADAPTED b14 A factory foreman discharged an hourly worker but did not notify the payroll department The foreman then forged the worker s signature on time cards and when giving out the checks diverted the payroll checks drawn for the discharged worker to his own use The most effective procedure for preventing this activity is toa Require written authorization for all employees added to or removed from the payroll b Have a paymaster who has no other payroll responsibility distribute the payroll checks c Have someone other than persons who prepare or distribute payroll obtain custody of