Question

(d) Explain how you will use your generalised audit software package to investigate the following:

- Correct allocation of annual leave in the employee master file.
· Possible duplicate existence of the same employee on the master file.
• The existence of possible ghost employees at the council.
Annexure 1
EXTRACT OF FIELDS AND RECORDS FROM THE EMPLOYEE MASTER FILE:
Employee Surname ID Number Date
Number
Engaged
23584676 Apple
23587580 Nkosi
23607183 Mashangu
23831428 Porter
23854693 Moloi
651208505 02/02/1980
580518409
01/11/1984
690315698
01/01/1988
820814457 01/04/2001
771103568
01/09/2002
Gender Level
M
M
F
F
M
C
D
D
C
E
Annual Income
Package
Tax
number
100 000
120 000
89 000
75 000
125 000
(8 Marks)
(3)
(2)
Annual
Norma
leave
allowed
121115
30
541254
32
845125 32
542184 30
562145 35
EXTRACT OF POLICIES AND PROCEDURES: HUMAN RESOURCES
All new employees are allocated a unique employee number consisting of eight characters and used as primary key
in both the employee master file and the payroll transaction file.
When an employee retires or resigns, his or her record is deleted from the master file and the employee number
cannot be used for a different employee in future.
All employees are salaried and must provide an income tax number for the deduction of income taxes.
Each employee can only be allocated to one cost centre
All salaries are paid electronically on the last working day of each month
Remuneration and leave is based on an employee's post grade. Salary ranges are allocated within each level, but
annual leave is fixed per level

Answer 1

Step-by-step explanation:

To investigate the correctness of the allocation of annual leave in the employee master file, the generalised audit software package can perform the following steps:

1. Extract Relevant Data: The software will extract the fields related to the employee master file, specifically the Employee ID Number and Annual Leave Allowed, from the provided data.

2. Compare Annual Leave Allowance: The software will compare the Annual Leave Allowed for each employee based on their Level (post grade) with the fixed leave allocation per level mentioned in the policies and procedures. It will flag any discrepancies where an employee's annual leave allowance does not match the fixed leave allocation for their level.

3. Generate Exception Reports: The software will generate exception reports listing employees whose annual leave allowance is inconsistent with the fixed leave allocation for their level. This report will help auditors identify and investigate potential errors or discrepancies in the allocation of annual leave.

To investigate the possible duplicate existence of the same employee on the master file, the generalised audit software package can perform the following steps:

1. Identify Potential Duplicates: The software will scan the Employee ID Number field in the employee master file to identify instances where the same ID number appears more than once.

2. Validate Unique Employee Numbers: As per the policies and procedures, all new employees are allocated a unique employee number. The software will check if any duplicate Employee ID Numbers violate this policy.

3. Highlight Duplicate Records: The software will flag any records with duplicate Employee ID Numbers and present them in a report for further investigation.

To investigate the existence of possible ghost employees at the council, the generalised audit software package can perform the following steps:

1. Identify Missing Payroll Transactions: The software will cross-reference the employee master file with the payroll transaction file to identify any employees who do not have corresponding payroll transactions for salary payment.

2. Check Employee Engagement Status: The software will verify if employees without payroll transactions are marked as "engaged" in the employee master file. Ghost employees might have records in the master file but no payroll transactions.

3. Generate Ghost Employee Report: The software will create a report listing employees with no corresponding payroll transactions and marked as "engaged" in the master file, suggesting potential ghost employees.

By using the generalised audit software package, auditors can efficiently and effectively identify discrepancies, duplicates, and potential ghost employees, helping to ensure the accuracy and integrity of the employee master file data.