CA Inter P5 · Chapter 5 · Question 11 of 12
The auditor of Nandan Security Services Ltd. suspects that the payroll includes 'ghost' employees. Which procedure is most effective in addressing this risk?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Comparing the payroll with personnel records and attendance, and checking for duplicate bank account numbers of employees
Explanation
Ghost employees are fictitious names on the payroll. Matching payroll to independent HR records and attendance, and looking for several employees paid into the same bank account, directly addresses this risk. Casting the register, overall comparisons and posting checks would not identify fictitious individuals.
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