The controller has provided the following description of his company's payroll system: Each worker is provided with a unique swipe card, and each day upon arrival and departure, the employee swipes the card in a card reader where the system records the employee number as well as arrival and departure times. Each Monday morning, the data collected by the card reader are printed by a payroll clerk and entered into the computerized payroll system. The payroll system is run every two weeks and updates the payroll records and prints out the employee paycheques. The cheques are automatically imprinted with the signatures of the president and vicepresident, finance, at the time of printing. The data processing department sends the cheques to the plant supervisors on Friday morning; they distribute them to the workers who are working that day or hold them for absent workers to pick up later. The plant supervisors do the hiring and handle terminations. The data processing department is informed by the plant supervisors when a new employee has been hired or an employee leaves the company. Any changes in hourly pay are communicated directly to data processing by the plant supervisors. The workers also finished a job ticket for each individual production order that they work on each day. These job tickets are collected each day and sent to cost accounting, where they are used to for cost distribution analysis.

Required

a. Identify four weaknesses in control procedures based on the controller's description of the company's payroll system. For each payroll system procedure listed, state the risk that it creates for the company and recommend an improvement in the controls to address the identified risk. Use three columns headed "Control weakness," "Risk," and "Recommendation." (12 marks)

b. Assess control risk for the payroll cycle at the company. Provide three examples of procedures that the auditor would likely perform in response to the control risk assessment for the payroll cycle. (4 marks)