This video explains how to use a payroll walkthrough to understand internal controls. Payroll is one of the most important transaction cycles in accounting. Therefore, it's important that external auditors understand the controls. A walkthrough provides insights into whether payroll is being properly processed and whether fraud might be occurring. In this video I provide key payroll controls that auditors need to look for. I also provide an overview of the payroll process. The walkthrough provides a basis of your payroll risk assessment, helping you identify potential risks of material misstatement. #CPAHallTalk
00:00 Introduction to payroll walkthroughs
00:17 Overview of payroll
03:42 Correction of errors
04:04 Direct deposit
04:22 Employee bank account number
04:50 Payroll fraud
05:10 Ghost employees
07:04 Payroll walkthrough questions
13:12 Payroll key controls
13:20 Authority to hire and fire
13:29 Entering pay rates
13:44 Capturing time
14:00 Review of payroll inputs before disbursing payroll
14:28 Removal of terminated employees from payroll
14:43 Who enters and changes bank account numbers
14:53 Budget to actual payroll reports
15:32 How errors are corrected
15:40 Segregation of duties
#CPAHallTalk