Canadian Payroll Reporter - sample

3 Canadian HR Reporter, a Thomson Reuters business 2019 News Canadian Payroll Reporter Employers unprepared for payroll audits Understanding the process is vital for compensation professionals: Survey BY SHEILA BRAWN IS YOUR payroll department ready for an audit? Do you know what information to provide and where to find it? A recent survey by Angus Reid Forum for the Canadian Payroll Association (CPA) found that 54 per cent of business leaders would not know how to prepare for a payroll audit. Among those who are directly responsible for payroll, 66 per cent said they would not know. The survey also found that close to 70 per cent of business leaders were unaware of or did not think about the potential for a payroll audit. This is despite the fact that many different types of agencies conduct payroll audits. They include the Canada Rev- enue Agency (CRA), Revenu Québec, employment standards boards, workers' compensation bodies, and provincial finance ministries that levy employer health taxes. Peter Tzanetakis, president of the CPA, said the association did not expect that such a high per- centage of employers would be unaware of payroll audits. "To us, that is extremely sur- prising, given the potential for an audit and the potential for penalties and the stigma that is associated with non-compli- ance," he said. "One of our intentions (in doing the survey) was to draw attention to the fact that ap- proximately 48,000 businesses across Canada are reviewed just by the CRA alone on an annual basis and they dole out just un- der $30 million in penalties," said Tzanetakis. "I think (an audit) is something that whether you are the payroll practitioner or the CFO or the CEO, you need to be aware of." For payroll professionals, in particular, it is vital to know what payroll audits are and how to prepare for them, said Sheena Graves, senior manager payroll delivery at Ceridian Canada. "It is important for payroll professionals to understand the payroll audit process simply be- cause they are often the front- line resource working with the auditor and responding to their inquiries," said Graves. "In addition, understanding the audit process can help to en- sure that all necessary records are being kept for the appropri- ate period and that they are orga- nized and stored in the most ef- ficient way to reduce additional effort and time the payroll team will need to set aside for an au- dit," she said. "While individual auditors may approach employers differ- ently, there are general rules of engagement," said Graves. "Payroll professionals that understand their role are bet- ter positioned to represent their organization." When a government agency contacts an employer to set up a payroll audit, it will normally provide a list of documents that the auditor will want to see when they arrive for the audit. "The documentation can include payroll input and out- put, manager sign-off, variance reasons, payment dates and the processing schedules," said Graves. The type of information may depend on which agency is con- ducting the audit. see PREPARE page 8

• Cover