Introduction. Audit of payments and settlements with employees is a relevant and widespread type of audit services. The purpose of the paper is to present in all essential aspects the concept of Audit of payments and settlements with employees, which can be applied in a practical environment to organize the audit process, as well as to improve the quality of accounting information, to correct violations and deficiencies and avoid possible financial sanctions. Results. The concept of Audit of payments and settlements with employees in the company, in our opinion, should describe the following main aspects: the purpose of the audit, subject and objects, audit tasks and sources of information, sequence of inspections, list of audit procedures and typical violations that may be identified during the audit. The purpose of the Audit of payments and settlements with employees is to confirm information on the completeness, accuracy, legality, accuracy of accounting and reporting, to confirm timeliness of payments to employees, taxes and fees, as well as to establish compliance with regulatory requirements. The subject of the Audit of payments and settlements with employees is the business processes and operations connected to the company's payments and settlements with employees, as well as the relationships that arise in the enterprise and beyond. Objects of Audit of payments and settlements with employees, in our opinion, should be divided into the following groups: elements of accounting policy; accounting operations; primary documents, accounting registers and reporting; information on violations of accounting, which are reflected in the documents of internal control, acts of inspections of state regulatory authorities, auditors' reports. An important aspect of the payroll audit concept is a list of structured common errors and irregularities that may be identified during the audit. Conclusion. The effectiveness of the audit and the impact of the audit on improving the quality of accounting information, eliminating violations and deficiencies, depends on the content of the concept used to conduct it.
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Problem 3-1 (IAA)
1.What are the attributes that make the information
provided in the financial statements useful to the
readers?
a.Qualitative characteristics of financial
information
b. Quantitative characteristics of financial
information
c.Elements of financial statements
d.Objectives of financial reporting
2.Qualitative Characteristics
a. are considered either fundamental or
enhancing.
b.contribute to the decision-usefulness of
financial reporting information.
c.distinguish better information from inferior
information for decision-making purposes.
d.All of the choices are correct.
3.The fundamental qualitative characteristics are
a.Relevance and faithful representation
b.Relevance, faithful representation and
materiality
c.Relevance and reliability
d.Faithful representation and materiality
4.Accounting information is considered relevant when
it
a.Can be depended on to represent the economic
conditions and events that is intended to
represent.
b.Is capable of making a difference in a decision.
c.Is understandable by reasonably informed users
of accounting information.
d.Is verifiable and neutral.
5.The ingredients of relevant financial information are
a.Predictive value and confirmatory value
b.Predictive value, confirmatory value and
timeliness
c.Predictive value, confirmatory value and
materiality
d.Predictive value, confirmatory value, timeliness
and materiality
6.What is the quality of information that gives
assurance that is reasonably free of error and bias?
a.Relevance
b.Faithful representation
c.Verifiability
d.Neutrality
7.Which of the following is the best description of
“faithful representation” in relation to information
in financial statements?
a.Influence on the economic decision of users
b.Inclusion of a degree of caution
c.Freedom from material error
d.Comprehensibility to users
8.To achieve faithful representation, the financial
statements
a.Must have predictive and confirmatory value.
b.Must be complete, neutral and reasonably free
from error.
c.Are understandable, comparable, verifiable and
timely.
d.Must possess all of these.
9.The financial accounting information is directed
toward the common needs of users and is
independent of presumptions about particular
needs and desires of specific users.
a.Relevance
b.Verifiability
c.Neutrality
d.Completeness
10. In the event of conflict between the economic
substance of a transaction and the legal form, the
economic substance shall prevail.
a.Form over substance
b.Substance over form
c.Relevance
d.Completeness
Problem 3-2 (IAA)
1. The enhancing qualitative characteristics of
financial information are
a.Comparability and understandability
b.Verifiability and timeliness
c.Comparability, understandability and
verifiability
d.Comparability, understandability, verifiability
and timeliness
2.Financial information exhibits consistency when
a. Accounting procedures are adopted which
smooth net income and make results consistent
between years.
b.Gains and losses are shown separately on the
income statement.
c.Accounting entities give similar events the same
accounting treatment each period.
d.Expenditures are reported as expenses.
3.When information about two different entities
engaged in the same industry has been prepared
and presented in similar manner, the information
exhibits the enhancing qualitative characteristic of
a.Relevance
b.Faithful representation
c.Consistency
d.Comparability
4.The characteristic that is demonstrated when a high
degree of consensus can be secured among
independent measures using the same
measurement method is
a.Relevance
b.Understandability
c.Verifiability
d. Neutrality