Payroll Audit Checklist for CPAs — Free Word

What it is

Payroll is usually a significant expense and involves disbursements, tax filings and benefit remittances. This checklist covers controls and substantive procedures for payroll in a financial statement audit or a payroll review.

It covers federal payroll forms and leaves space for state requirements, which vary.

When to use it

Year-end audit or review of payroll expense and accrued payroll liabilities.
Internal audit or agreed-upon procedures on the payroll cycle.

What’s inside

Controls: hiring, terminations, rate changes, timekeeping and segregation of duties
Payroll register to GL and Forms 941 reconciliation; W-2/W-3 to payroll register
Tax deposits, Form 940 (FUTA) and state unemployment and withholding
Benefits and 401(k) remittance timing, accrued payroll and PTO
Employee vs contractor classification and fraud indicators

Standard cited

This template follows AU-C 330 / IRS payroll forms. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use. See AU-C 330 explained.

Download free Word template (.docx)

Questions

How fast must 401(k) deferrals be deposited?

Under DOL rules (29 CFR 2510.3-102), as soon as they can reasonably be segregated from the employer’s assets, and in no event later than the 15th business day of the month following the month the amounts were received by the employer (an outer limit, not a safe harbor). Plans with fewer than 100 participants at the beginning of the plan year have a safe harbor for deposits made by the seventh business day.

What payroll forms should reconcile?

The four quarterly Forms 941 should agree to the payroll register and the GL, and total Form W-3 wages should agree to the annual 941 totals after known reconciling items.

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Last updated 11/04/2026. All free templates.