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Annual Audit Case Study -- for an annual audit of a Payroll Cycle Case Study Facts: able Your audit team flowcharts the payroll cycle of your manufacturing company client. The audit team notes the following through preparation of the flowcharts and discussion with client personnel: Payroll personnel have applicants properly complete employment applications. Compensation for new employees is properly determined by reference to union contracts and authorizations prepared by department heads. Hourly employees complete time cards but supervisors often do not review and sign the time cards to document their approvals. The clerks in the payroll department gather all information for input to the computer to prepare the payroll register. The payroll supervisor reviews and signs these documents to indicate his/ her approval only if he/she has time. Payroll checks are prepared and reviewed by payroll department employees. The payroll checks are distributed to employees by one of the payroll department clerks. Payroll department personnel prepare and review payroll adjusting journal entries to record payroll for the period in the general ledger. Due to a shortage of accounting department personnel, the Controller's Department is several months behind in reconciling payroll expense per the general ledger to payroll expense per the payroll department records. Question: Describe two weaknesses in internal control in this revenue cycle. • Payrool for the period in counting departmense per the gen
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