The Payroll Audit Course

OBJECTIVES:

By the end of the workshop, delegates will have:

• acquired the knowledge to test if the establishment of the payroll function is being managed effectively and efficiently,
• identified opportunities for improving management, and to spot any weaknesses that many have arisen in the system;
• reviewed the basic elements of fraud awareness and explored the nature of fraud procedures applicable and how to prevent fraud;
• a good understanding of the employer’s policy and compliance with legal requirements, methods of making payment and the timetable requirements for paying employees;
• a good understanding of how to secure date from loss, fraud and error that are fundamental to the proper management of payroll.

COURSE OUTLINES

INTRODUCTION

• What is Payroll Audit
• Objectives of Internal Audit for Payroll

PAYROLL IN THE ORGANISATION

• The Internal Auditors examining the functions that payroll performs in the organisation
• Examining different payment methods applicable to employees including issues such as commissions, bonus, share options, and fringe benefits
• Examining the systems for setting and increasing pay are effective
• Determine whether correct payroll data are brought into the financial and management accounts of the organisation.

SETTING UP PAYROLL

• The legal implication of payroll
• The employer’s policy on issues related to payroll
• The method of making payment to employees
• The timetable for processing the payroll.

SUPPLY OF INFORMATION

• Proper system for controlling the supply of information to and from the Payroll department
• Check authorisations, notifications, complete details, and records keeping
• Information from payroll
• Overriding interest disclosure
• People, equipment, stationary, regulations and Internet data.

PAYROLL SECURITY

• Check the procedure for protecting data from loss
• Protection against fraud and error
• Security of Cash
• Loss of Computer
• The risk of Fire
• The risk of electrical damage
• Other software security

INTERNAL AUDIT REPORT ON PAYROLL

• Human Resources responsibility for the administration of payroll
• Review of the actual time sheets (“Ghost Employees”)
• Sampling of payroll time sheets
• To accomplish task, conduct staff and management interviews, examined written procedures, examined personnel files and financial records, and reviewed audit literature on payroll risks and controls
• Review relevant internal control structures
• Use of data extraction software for several audit tests
• Control characteristics
• Key risk areas and controls
• Objective and nature of tests of control
• Analytical procedures

RISK MANAGEMENT – PAYROLL

• Introduction to Risk Management
• Impact of Risk Management on payroll
• Development of risk management framework in line with the organisation Payroll Policy
• Risk Assessment – Payroll
• Materiality and risk
• Audit risk model

AUDITING PAYROLL - IT SYSTEMS

• Planning and procedural mechanism applied
• The acquisition and implementation of IT Systems
• The delivery and support of IT Systems
• Monitoring and learning to enhance capability
• Use of Computer Associated Audit Techniques (CAATS)
• Record keeping, tools and techniques
• Types of cyber-crime

FRAUD – PAYROLL

• The nature of payroll fraud
• Examples of fraud
• Creating on anti-fraud culture
• Whistle blowing
• Risk Assessment
• Methods of detection
• Investigating fraud