December 2022 Internal control & Audit Risk
Each week the hours worked The transfer of the hours Review a sample of weeks
are automatically transferred worked from the key card transferred from the key
to the payroll system system to the payroll system card system to the payroll
however no checks over this should be checked by a system for evidence that
transfer are performed. senior official in the payroll they have been checked by a
There is a risk that there department and this check senior official prior to the
might be errors within the should be evidenced by way payroll being finalized.
transfer of data and of signature.
employees may be paid
incorrect amounts leading to
loss of employee goodwill.
If any changes to the payroll The edit report should be For a sample of weekly edit
data are required the payroll reviewed on a weekly basis reports, confirm that these
clerk makes the amendment by a senior official from the have been signed as
but this is not review. There payroll department before reviewed by a senior official
is a risk that the payroll the payroll is finalized and from the payroll department.
clerk can make errors when any payments made. This
entering data or fraudulently review should be evidenced
paying friends or family by way of signature.
leading to an increase in
payroll expense and also
employees being paid
incorrectly leading in loss of
employee goodwill.
IA was only able to The board should set a Review the board minutes
complete comparison at one policy to ensure that for evidence of new policy
factory and one warehouse. comparisons must be carried set by the board regarding
If the non-current assets out more frequently. Ia the frequency of IA visits.
register is not physically should review their program Review IA programme to
verified on a regular basis, of visits to assess if assess whether visits are in
there is an increased risk of additional resources could line with new policy.
assets being misappropriated be devoted to ensure that all
as there is no check that the sites are visited in shorter
assets still exist in their period.
correct location and obsolete
assets may not be identified
on a timely basis.
On a weekly basis a bank The finance director should A sample of payment
payments list is generate for review the whole payments listings should be reviewing
supplier payments. The list prior to authorizing. He to verify that the finance
finance director reviews the should evidence this review director has reviewed them
total amount of the bank by way of signature. and also agreed the amounts
payments list and authorizes to supporting documentation
it. There is a risk that some prior to the bank transfer
amounts may cancel out being made
themselves and errors not
spotted also suppliers could
be paid an incorrect amount
or ficititious suppliers being
paid.
When staff wish to purchase A petty cash book should be Review a sample of petty
sundry items, the required maintained so that the cash transactions to ensure
sum of cash is given to the amount borrowed, date and that all cash issued has been
staff member who signs for employee name is recorded accounted for and receipt
it, they are required to return together with details of the provided for expenses.
the excess but no sundry purchase made.
requirement for receipts is When returning excess cash
needed. There is a risk that employees should be made
since no receipts are needed to return the receipt for
the employees can be sundry purchases and the
making personal purchases petty cash book updated.
with the money, they can
also bring incorrect amounts
as excess.
Magpie is a new client for Crow & Co
which means that they will not be familiar
with the accounting policies, balances and
transactions used by the client. There is
detection risk.
