You are reviewing audit work papers containing a narrative description of the Tenney Corporation's factory payroll system. A portion of that narrative is as follows:

Factory employees punch time cards each day when entering or leaving the shop. At the end of each week, the timekeeping department collects the time cards and prepares duplicate batch control slips by department showing total hours and number of employees. The time cards and original batch control slips are sent to the payroll accounting section. The second copies of the batch control slips are filed by date.

In the payroll accounting section, payroll transaction data from the information on the time cards are keyed through a terminal to a transactions tape, and a batch total for each batch is keyed from the batch control slip. The time cards and batch

control slips are then filed by batch for possible reference. The payroll transaction data and batch total data are transmitted to data processing. Each batch is edited by a computer program that compares each employee number against a master employee file and the total hours and number of employees against the batch total data. A detailed printout by batch and employee number indicates batches that do not balance and invalid employee numbers. This printout is returned to payroll accounting to resolve all differences.
In searching for documentation, you found a flowchart of the payroll system that included all appropriate symbols but was only partially labeled. The portion of this flowchart just described appears above.
Required:

a. Number your answers 1 through 17. Next to the corresponding number of your answer, supply the appropriate labeling (document name, process description, or file order) applicable to each number symbol on the flowchart.

b. Flowcharts are one of the aids an auditor may use to obtain an understanding of a client's internal control. List advantages of using flowcharts in this context.

Transcribed Image Text:

TIMEKEEPING DEPARTMENT From Factory Time Clocks TENNEY CORPORATION FLOWCHART OF FACTORY PAYROLL SYSTEM PAYROLL ACCOUNTING SECTION (1) (2) (4) By department Total hours Number of employees (3) (5) By Date (6) (7) Batch total Data (9) 161 (8) (17) DATA PROCESSING (10) (11) (12) (13) (14) (15) (16)