HR Audit is an evaluation of human resource management in firm’s systems and processes for the short and long-term. In bare basics, it has 3 broad areas:
Approval process and system recording like Employee Payroll System etc.
Regulations for Employees like Work Health Safety Acts etc.
Practices in Recruitment, Reimbursement etc.
During financial audit, one of the common problematic area is in the Employee Payroll and Staff Payment.
Weak internal controls and documenting could result in incorrect payment that will rise auditors’ concerns. It is not only on that single record but against the entire period of expenses.
A Payroll system will greatly reduce such inconsistency pertaining to firm’s organizational aspect.