*Key Scope *Scope *Work Package Description

Audit of Expendit Payroll Compliance/Controls

Audit of Expendit Payroll Substantive Testing
Audit of Expendit Payroll Analytical Procedures
*Key Scope *Scope *Work Package *Title Description Planned Start Date
Audit of Expendit Payroll Substantive Testing Substantive Testing 5/4/2021
Audit of Expendit Payroll Analytical ProceduresAnalytical Procedures 5/4/2021
Planned End Date
5/28/2021
5/28/2021
*Key Scope *Scope *Work Package *Test Procedure Title *Step Title
Substantive Testing A. Existence and

Audit of Expendit Payroll Substantive Testing

 Substantive Testing B. Completeness

Audit of Expendit Payroll Substantive Testing

 Substantive Testing C. Measurement

Audit of Expendit Payroll Substantive Testing

 Substantive Testing D. Regulatory

Audit of Expendit Payroll Substantive Testing

 Substantive Testing E. Presentation an

Audit of Expendit Payroll Substantive Testing

Step Description
1. Select a sample of
transactions (as
required for certification
requirements / for
purposes of testing
controls / for additional
substantive compliance
testing)
2. Refer to the Payroll
Register for all
employees in the
sample
3. From the sample of
transactions check that:
employee is identified in
Payroll Register; and
that that payment was
made to correct payee
4. Check attendance
records to determine
that employees in
sample earned the
amount due in pay (this
is a test of attendance,
not of effort)
5. Direct deposit – do
we need confirmation
from bank of employee
in sample regarding
amounts deposited and
identity of individual who
holds account?
6. Be present on one or
more occasions when
cash is distributed to
employees below level
5 and check that those
1. Compare list of
employees paid against
Establishment Register
for selected months
2. Select a sample of
employees who recently
retired / transferred out /
otherwise left the office
and check whether any
received payments after
date of leaving
(adjusting for timing of
last payment)
3. Select a sample of
employees recently
joining the office and
confirm that they were
not paid before they
commenced
4. Conduct a
reconciliation (and/or
check a batch of
transactions) between
{Direct Credit Advice /
Payroll Advice / DDO
monthly statement } and
Monthly Schedule of
Employees’ Salaries
and General Ledger
5. Take a sample of
employees (from
establishment listing /
telephone list / or other
source) and check that
they have received
payment out of the
payroll system
1. For the sample of
transactions check: 1)
that payment received
by employee is correct
according to Payroll
Register; 2. that the
Payroll Register is
consistent with relevant
Rules applying to
promotion, pay rates
and entitlements; and 3)
that deductions are
correct (according to the
DP Fund / the income
Tax Ordinance, 1979
and as modified from
time to time / other
deductions in
accordance with rules
and regulations
governing deductions
such as rent deductions,
loans and advances /
etc.)
3. Check for the
selected sample of
employees recently
joining the office that the
amount of the first
payment was correct
according to the start
date and according to
their Payroll Register
4. Check for the
selected sample of
employees who recently
left the office that the
1. Check that all
documents relating to
the sample of
transactions/employees
are completed fully,
have proper
authorisation (including
checking signing
authority and signatures
of the approving
officers)
2. Any rules regarding
receipt of increments in
pay should be checked
(including for example
disciplinary actions /
satisfactory
performance /
qualifications or
certifications required to
advance beyond
barriers / etc)
3. Check that the total
number of employees
(by individual units)
receiving pay does not
exceed stipulated
establishment limits

To be completed after
examination of relevant
Regulations / Rules
applying to Employment
1. Check that payroll
payments are correctly
identified in the General
Ledger under Payroll
Object and correctly
coded according to the
Chart of Accounts by
checking for the sample
of transactions that the
net pay and deductions
have been correctly
coded according to the
Chart of Accounts
codes.
2. Check whether the
payroll section receives
timely reports from the
General Ledger under
the relevant Object
Codes and that the
information is presented
in a way that it can be
used by the payroll
section.
3. For a sample of
months, check that the
total pay (gross, net and
deductions) are
correctly presented in
the General Ledger by
making the necessary
calculations (which will
be much easier through
the use of CAATs).
*Key Scope *Scope *Work Package *Title Description Weight
Audit of Expendit Payroll Compliance/Controls A. Is there a 1. Are there 1
separate
authorities for
approving
changes to
employee status /
maintaining
employee records
/ making
calculations and
specifying pay /
authorising
payment /
distributing
cheques or cash?

By verbal enquiry,
observation
and/or
walkthroughs,
check that the
above functions
are carried out by
separate
individuals or
where these are
not separate
determine
whether this is
reasonable (such
as too small an
organisation to
efficiently and
effectively
separate these
functions)
Audit of Expendit Payroll Compliance/Controls B1. Are emplAre employee 1
files properly
maintained and
up-to-date and
are any changes
to employee
status promptly
communicated to
pay section?

By verbal enquiry,
observation
and/or
walkthroughs,
check that the
above controls
are in place (such
as control over
pass words for
electronic access
to files / limited
availability of keys
for filing cabinets /
proper controls
for authorising
and approving
changes to data
on Payroll
Register).

Check for a
sample of
changes to
employee status
the dates of:
change in
employee status /
Audit of Expendit Payroll Compliance/Controls B2. Are empl1. Is there sufficie 1
Audit of Expendit Payroll Compliance/Controls B3. Are empl2. Is there a syste 1
Audit of Expendit Payroll Compliance/Controls B4. Are empl3. Are there contr 1
Audit of Expendit Payroll Compliance/Controls C1. Are ther Are there controls 1
to prevent or
detect payments
being made in
error (employee
left / changed
status / not a
bona-fide
employee)?

By verbal enquiry,
observation
and/or
walkthroughs,
check that the
above controls
are in place (such
as appropriate
communications/a
ssurances from
personnel area
that the employee
status information
is correct for
period covered by
payroll run /
examine
employee files for
any
communications
of feedback on
late pay, errors in
pay {note:
employees are
only likely to
report errors of
insufficient pay –
Audit of Expendit Payroll Compliance/Controls C2. Are ther 1. Are the identiti 1
Audit of Expendit Payroll Compliance/Controls C3. Are ther 2. Is the personnel 1
Audit of Expendit Payroll Compliance/Controls C4. Are ther 3. Are there checks 1
Audit of Expendit Payroll Compliance/Controls C5. Are ther 4. Is the function o 1
Audit of Expendit Payroll Compliance/Controls D1. Are ther Are there 1
adequate controls
over
computations of
salaries and
wages, and
deductions?

By verbal enquiry,
observation
and/or
walkthroughs,
check that the
above controls
are in place (such
as supervisory
activities /
information on
training / any
guidelines on
upper limits on
individual
payments /
listings of errors,
omissions,
corrections).

Check a sample
of changes to
employee status
to ensure that
these changes
have been
incorporated in
the pay
calculations
Audit of Expendit Payroll Compliance/Controls D2. Are ther 1. Do personnel in 1
Audit of Expendit Payroll Compliance/Controls D3. Are ther 2. Are employees i 1
Audit of Expendit Payroll Compliance/Controls D4. Are ther 3. Where pay calcu 1
Audit of Expendit Payroll Compliance/Controls D5. Are ther 4. Is there an inde 1
Audit of Expendit Payroll Compliance/Controls D6. Are ther 5. Are records kept 1
Audit of Expendit Payroll Compliance/Controls D7. Are ther 6. Are notification 1
Audit of Expendit Payroll Compliance/Controls D8. Are ther 7. Is there a file 1
Audit of Expendit Payroll Compliance/Controls E1. Are ther Are there controls 1
to ensure
payments
properly
authorised?

By verbal enquiry,
observation
and/or
walkthroughs,
check that the
above controls
are in place
(including
documentation of
delegation of
authority /
supervisory sign
offs)

Obtain a list of
adjustments
made to following
month’s salary
payment because
of previous error
in salary payment
– if no such list
exists, by
scanning a series
of payments,
select a sample of
adjustments and
determine causes
of errors that led
to such
adjustments –
Audit of Expendit Payroll Compliance/Controls E2. Are ther 1. Are there approp 1
Audit of Expendit Payroll Compliance/Controls E3. Are ther 2. Is there a prope 1
Audit of Expendit Payroll Compliance/Controls E4. Are ther 3. Are there proper 1
Audit of Expendit Payroll Compliance/Controls E5. Are ther 4. Is there a forma 1
Audit of Expendit Payroll Compliance/Controls E6. Are ther 5. Is there a 1
system of
recording that the
supervising
payroll officer
has, as required:
• Checked that
all amendments
to payroll are
accurate and
there are no
unauthorised
amendments
• Compared
current month
payroll to last
month payroll and
reviewed any
exceptions
• Compared
manual payroll to
computer payroll
to ensure that no
employee is paid
twice

Audit of Expendit Payroll Compliance/Controls E7. Are ther 6. Does the supervi 1
Audit of Expendit Payroll Compliance/Controls F1. Is transmIs transmittal of 1
direct credit /
distribution of
cheques / cash
properly
controlled?
By verbal enquiry,
observation
and/or
walkthroughs,
check that the
above controls
are in place (such
as reviewing
written approvals,
attending pay
distribution to
those employees
receiving pay in
cash).
Audit of Expendit Payroll Compliance/Controls F2. Is transm1. Is the computer 1
Audit of Expendit Payroll Compliance/Controls F3. Is transm2. Are payrolls app 1
Audit of Expendit Payroll Compliance/Controls F4. Is transm3. Are payrolls ap 1
Audit of Expendit Payroll Compliance/Controls F5. Is transm4. Is net pay distr 1
Audit of Expendit Payroll Compliance/Controls F6. Is transm5. For payroll paid 1
Audit of Expendit Payroll Compliance/Controls F7. Is transm6. Is there an inde 1
Audit of Expendit Payroll Compliance/Controls G1. DeductioAre there controls 1
to ensure
deductions are
aggregated and
filed/transmitted
in an accurate
and timely
manner?

Review the
manual/computer
system(s) to
assure that the
appropriate steps
are carried out,
ensuring
adequate controls
are in place

For a manual
system: by verbal
enquiry,
observation
and/or
walkthroughs,
check that the
above controls
are being applied

Audit of Expendit Payroll Compliance/Controls G2. Deductio1. In a computeris 1

Audit of Expendit Payroll Compliance/Controls G3. Deductio2. In a manual sys 1
Audit of Expendit Payroll Compliance/Controls G4. Deductio3. Is there confirm 1
Audit of Expendit Payroll Compliance/Controls G5. Deductio4. Are there regula 1
Audit of Expendit Payroll Compliance/Controls H1. Are ther Are there controls 1
to ensure
payments are
properly
recorded?

Review the
manual/computer
system(s) to
assure that the
appropriate steps
are carried out,
ensuring
adequate controls
are in place

For a manual
system: by verbal
enquiry,
observation
and/or
walkthroughs,
check that the
above controls
are being applied
During
substantive
testing, or by
analytical review,
check that for a
particular pay run,
the total
payments for the
payroll are
identical to the
figure posted to
the General
Audit of Expendit Payroll Compliance/Controls H2. Are ther 1. Does the supervi 1
Audit of Expendit Payroll Compliance/Controls H3. Are ther 2. Is there regular 1
Audit of Expendit Payroll Compliance/Controls H4. Are ther 3. Is there regular 1
*Key Scope *Scope *Work Package *Title Description