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Question 75 - IIA-CIA-Part2 discussion

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Due to a recent system upgrade, an audit is planned to test the payroll process. Which of the following audit objectives would be most important to prevent fraud?

A.
Verify that amounts are correct.
Answers
A.
Verify that amounts are correct.
B.
Verify that payments are on time.
Answers
B.
Verify that payments are on time.
C.
Verify that recipients are valid employees.
Answers
C.
Verify that recipients are valid employees.
D.
Verify that benefits deductions are accurate.
Answers
D.
Verify that benefits deductions are accurate.
Suggested answer: C

Explanation:

Verifying that recipients are valid employees is crucial in preventing payroll fraud. This audit objective ensures that only legitimate employees receive payments, thereby mitigating the risk of ghost employees or payments to terminated employees. While verifying amounts, payment timeliness, and benefit deductions are important, ensuring the validity of recipients directly addresses the potential for fraudulent activities in the payroll process.

Reference:

IIA Practice Guide on Auditing Employee Compensation and Benefits.

IIA Standard 1220: Due Professional Care.

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asked 18/09/2024
Gabriel Ty
33 questions
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