Butler, CPA, has been engaged to audit the financial statements of Young Computer Outlets, Inc., a new client. Young is a privately owned chain of retail stores that sells a variety of software and video products. Young uses an in-house payroll department at its corporate headquarters to compute payroll data and to prepare and distribute payroll checks to its 300 salaried employees.

Butler is preparing an internal control questionnaire to assist in obtaining an understanding of Young?s internal control structure and in assessing control risk.

Required

Prepare a ?Payroll? segment of Butler?s internal control questionnaire that would assist in obtaining an understanding of Young?s internal control structure and in assessing control risk. Focus on preparing questions about payments based on hourly rates and payroll tax accruals other than with holdings. Use the format in the following example:

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Questions Yes No 1. Are paychecks prenumbered and accounted for? 2. 3.