AP12.10: Potential misstatements/tests of controlspayroll

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 electronic payroll deposits appropriately authorized?
5. Is there internal verification of payroll checks with payroll register data?
6. Is access restricted to personnel and employee earnings master files?
7. Is hiring of new employees authorized by personnel department?
8. Are payroll tax returns and payment of payroll taxes reviewed for accuracy and for timely filing?

Required

1. Identify a misstatement that may occur if a NO answer is given to each question.
2. 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.)