Payroll Audit

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CA Sumit Arora (Querist)
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26 August 2009 Can any body tell me what are the implications and recommendations on the following matters.

1. On official duty slip in the Row of Purpose it is only written official, but that is not sufficient, Official duty slip is maintained by Gate keeper of company when any person goes out of the company premises for any official work.

2. In Salary Register the details are not filled up properly for e.g No of Days worked and Leave availed

3. Difference in Salary Register.

4. Company has maintained multiple attendance records and all records do not reconcile with each other.

5.Tax computations of employees were not available and on Tax has been deducted.

6. The difference in no. of employees between PF Return and Salary Register.

7. No Policy for Staff Imprest and Staff Advance has been framed by the company.

vrnanda

vrnanda (Expert)
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05 September 2009 Hi Sumit,
Answers to your queries is as follows:

1) Please mention what exactly is your query.

2) in such kind of situations, the probability of the payments made to the employees are in excess of the eligible amount, like an employee might worked only for 5 days but paid a monthly salary.
You need to see on a sample basis to the attendance register whether the only actual number of days has been paid. If not make it a Point for Discussion in Management Letter.

3) what do you mean by difference salary register?

4) How can there be multiple attendance records, can please explain what exactly the attendance records, so as to clarify you doubt.

5) It should have maintained computation sheets, other wise take on a sample basis and recompute the tax liability and arrive at the difference and discuss with the manager and close the issue. Also make it a management letter point.

6) It could have happened because there could be employees joined this month but the salary has been paid next month. Some entities follow when they pay salary they will pay the same. Ask for a reconciliation so that you will get comfort. But remember PF is not a compulsory payment for the employees whose monthly salary exceeds (Rs. 10,000 or Rs. 6,500 will confirm the amount later)

7) I don't think all the companies are properly and professionally organized. Hence you may not get the policy documented, but have a meeting with the manager to get an understanding of what actually they are following, document the minutes and check whether what was said by the manager was actually been followed or not. Also inform the management in the management letter of the deficiency.