Our Payroll Audit Work Program provides a structured approach to conducting effective payroll audits, emphasizing their importance in verifying tax withholdings, identifying errors, preventing fraud and ensuring compliance with labor laws. It outlines key phases of the audit process, starting with gathering employee rosters and payroll reports and reconciling them against employee hours, payments and company accounts. This document highlights essential steps, such as reviewing internal controls, performing analytical procedures, interviewing personnel and issuing comprehensive audit reports. By conducting regular payroll audits, organizations can strengthen their financial integrity, identify areas for improvement and mitigate risks associated with payroll errors or fraud.

Included within the document are two samples designed to assist auditors in developing systematic and tailored audit plans. Sample 1 focuses on pre-planning activities, including obtaining prior audit documentation, verifying payroll calculations and assessing deductions. It emphasizes preparation and thorough documentation throughout the audit process. Sample 2 centers on evaluating organizational structures, internal controls and payroll changes, such as terminations and bonuses. It also incorporates detailed steps for payroll bank reconciliation and year-end reconciliation processes. Both samples serve as customizable tools, enabling organizations to enhance efficiency and ensure that payroll operations align with the best practices and compliance requirements.

Audit steps include:

• Coordinate internal audits with external auditors and compliance auditors regarding their roles in the audit and the responsibilities of each group.
• Determine if there is an automatic feed between the payroll system and the general ledger.
• Interview facility services personnel to obtain an understanding of department objectives and processes.
• Hold a closing meeting with key management to review draft IA reports and findings.