Each of the following internal control has been taken from a standard internal control questionnaire for assessing control in the payroll and personnel cycle.

1.Approval of department heard or foreman on time cards is required before preparing payroll.

2. All prenumbered time cards are accounted for before beginning data entry for preparation of checks.

3. The payroll accounting software application will not accept data input for an employee number

not contained in the employee master file.

4. Persons preparing the payroll do not perform other payroll duties (timekeeping, distribution of

checks) or have access to payroll data master files or cash.

5. The computer calculates gross and net pay based on hours inputted and information in employee

master files, and payroll accounting personnel double-check the mathematical accuracy on a test basis.

6. All voided and spoiled payroll checks are properly mutilated and retained.

7. Personnel requires an investigation of an employment application from new employees.

Investigation includes checking the employee's background, former employers, and references.

8. Written termination notices, with properly documented reasons for termination, and approval of an

appropriate official are required.

9. All checks not distributed to employees are returned to the treasurer for safekeeping.

10. Online ability to add employees or change pay rates to the payroll master file is restricted via

passwords to authorized human resource personnel.

Requied:

A. For each internal control, identify a specific misstatement that is likely to be prevented if the control exists and is effective.