College of Our Lady of Mercy of Pulilan Foundation, Inc.

Business Management Department

SY 2021 - 2022
PrC-ACE: Auditing in CIS Environment

NAME ROCHELLE ANNE R. CLEMENTE SECTION 4TH YEAR, BSA

Tutorial No. : 3 Activity No.: 1

Topic : Computer-Aided Audit Tools – ACL 9
Table Name : PAYROLL

ACL 9
Tutorial 3

These tutorials are supplemental exercises that relate to ACL 9 topics covered in:
1. Module 3: Auditing the Revenue Cycle
2. Module 4: Data Structures and CAATTs for Data Extraction
3. Module 5: Auditing the Expenditure Cycle
4. Module 6: Business Ethics, Fraud, and Fraud Detection

The tutorials presume that the student has installed ACL from the CD accompanying the text
and has worked through the ACLStart.pdf document in the ACL Manual folder. The tutorials
are not a substitute for this basic ACL knowledge.

These tutorials use data tables stored in the Sample Project.acl that is automatically
installed with ACL. Open the sample project and click on the appropriate table to perform
the tutorial. The name of the table is indicated in bold type prior to each section in the tutorial
(e.g. AP TRANS).
PAYROLL
Run DUPLICATES option from the ANALYZE menu bar option. Make sure to check
“GAPS”, “PRESORT”, and “DUPLICATES” in the dialogue box. Click on “Employee
Number” as the column to verify sequence. Go to the OUTPUT tab and set output to
SCREEN. Click OK.
Paste screenshot below:

Requirement 1: Explain the results you get.

There are many gaps in giving employee numbers thus, there is not a proper sequencing
of employees.

Requirement 2: How many duplicates do you have? How many gaps?

There is 1 duplicate and 40 gaps detected.

Requirement 3: Could the gaps be legitimate; that is, they do not of themselves indicate
errors or fraud?

Pay to employee 000320 was duplicated. That is a fraudulent act because it was
evidenced by the check number which is different from one another.
Requirement 4: If so, describe an alternative test.

An alternative test may require Employee No. 000320 to return the check or call the bank
for the cancelation of one check if possible and reverse/adjust the entries affected.

Requirement 5: What would you think of the results as an auditor?

As an auditor, I think this kind of system may cause some casualties like double pays to
employees or having so-called ghost employees.

Requirement 6: What would you do with the results?

Based on the given results, there should be proper sequencing of employees to prevent
such fraudulent acts that will surely affect the integrity of the company.

Requirement 7: What other field would you check for DUPLICATES or GAPS?

Aside from the Employee Number, I would also check the Cheque Number, there might be
some error on recording the same check.

Run the DUPLICATES command again.

Run SORT by Employee Number. Use OUTPUT FILE name PAYROLL- EmpNo. Run
DUPLICATES option. Come up with a selection for the Sequence On side that will detect
possible duplicate checks even though the employee numbers are different (such result
would be more likely to be fraud than error, but surely one or the other). On the List Fields
side, choose the first 5 fields in a sequence that will make it easy for you to interpret the
results. Make sure Output Tab has SCREEN option for output results. Click OK.
Paste screenshot below:

What results do you get?

A duplicate appears with regards to the Employee Number having the same gross pay, net
pay, taxable amount and the date the checks are given, but with different check numbers.

How many duplicates do there appear to be in the file?

One (1) duplicate appears to be in the file. This implies that Employee No. 000320
receives two different checks on the same day.
Run DUPLICATES again, this time check GAPS and SEQUENCE on Check Number.

Do you find any patterns in the data that need investigation?

Checks numbered 12389-12392 seem to be missing and needs further investigation as to

based on the examination of the file.

Does the report give you some direction for substantive testing?

Yes, certain substantive testing can be done which includes an actual examination of the
duplicates and gaps detected for gathering evidence.

Use COMMENT to insert a comment into the LOG file that notes your concerns. Instead of
using TOOLS->COMMENT, just enter it manually in the text box in the LOG window; start
with “COMMENT...”.
Paste screenshot below: