The following questions are included in the internal control questionnaire on control procedures for payroll transactions in the Pena Company:

1. Are pay rates, payroll deductions, and terminations authorized by the personnel department?

2. Are time clocks and clock cards used?

3. Is there supervisory approval of time worked by each employee?

4. Are payroll checks signed and distributed by treasurer office personnel?

5. Is there internal verification of payroll checks with payroll register data?

6. Are unclaimed wages controlled by a treasurer’s office employee?

7. Is access restricted to personnel and employee earnings master files?

8. Are hirings authorized by personnel department?

9. Is time clock punching supervised?

10. Is responsibility assigned for the timely filing of payroll tax returns and payment of payroll taxes?

Required

a. Identify a misstatement that may occur if a No answer is given to each question.

b. Identify a possible test of controls assuming a Yes answer is given to each question. (Present your answers in tabular form using separate columns for each part.)