Question 1

What is involved in a payroll audit?

Accepted Answer

A payroll audit is a compliance mechanism where an internal or external audit team will verify the accuracy of a company’s payroll management practices and check if they are complying with the labour and tax laws of India.

Question 2

What happens if you fail a payroll audit?

Accepted Answer

If you fail a payroll cycle audit, then you are inviting legal trouble and penalties for non-compliance. If you hire an expert audit agency like ALP Consulting, then they can help with finding

Question 3

What are the 3 main types of payroll audits?

Accepted Answer

The 3 main types of payroll audits include a payroll internal audit carried out by an in-house team of an organisation, an external payroll audit performed by a third-party agency, and a government agency audit carried out by a government-appointed payroll audit team.

Question 4

Why should businesses audit their payroll regularly?

Accepted Answer

Businesses must conduct a payroll audit frequently to ensure accuracy and compliance are maintained to avoid legal issues and penalties for non-compliance. A payroll audit will also help in finding errors, fraud and improvement areas that can help in making payroll management better and error-free.

Question 5

How often should payroll be audited?

Accepted Answer

A payroll audit must be conducted at least once a year to verify the accuracy and compliance of the payroll management system. A quarterly and half-yearly internal payroll audit will help a great deal in fixing errors and achieving 100% compliance.

Question 6

How to prepare for a successful payroll audit

Accepted Answer

To prepare for a successful payroll audit, an organisation must organise and maintain accurate payroll records, verify accuracy and compliance with laws and regulations, carry out frequent payroll audits, and involve stakeholders for transparency.

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