es tracing w labor.com hould poration TOOL 19 (OBJECTIVES 20-2, 20-3) Items 1 through 8 are selected qu ernal control questionnaires used by auditors to obtain an understanding ntrol in the payroll and personnel cycle. In using the questionnaire for a client, a "yes" response to a question indicates a possible internal control, whereas a "no" indicates a potential deficiency. appropriate official authorize initial rates of pay and any subsequent 1. Does an changes in rates? 2 Are formal records such as time cards used for keeping time? 3 Is approval by a department head or supervisor required for all time cards before they are submitted for payment? 4. Does an adequate process exist to ensure proper coding of time records to specific jobs or products, such as work orders, job numbers, or some similar identification provided to employees? 5. Is the distribution of payments to employees independent of timekeeping? quired to use direct deposit? 6. Are employees required to show identification to receive paychecks or are they re- 7. Are written notices documenting reasons for termination required? & Does anyone independently verify the payroll bank account reconciliation? a. For each of the questions, state the transaction-related audit objective(s) being ful- Required filled if the control is in effect. b. For each control, list a test of control to test its effectiveness. if the control is not in effect. c. For each of the questions, identify the nature of the potential financial misstatement(s) d. For each of the potential misstatements in part c., list a substantive audit procedure for determining whether a material misstatement exists. rome of the tests of controls and substantive cle (Fach