What does a payroll audit involve?

A payroll audit is a systematic examination of payroll records and processes to ensure compliance with laws and regulations, as well as to verify the accuracy of the data being reported. This process typically includes reviewing employee earnings, hours worked, tax withholdings, and other deductions to confirm they are recorded correctly and that the payroll practices align with applicable labor laws and company policies. By conducting a payroll audit, organizations can identify discrepancies, prevent errors, and enhance overall payroll management.

The other options focus on activities that do not align with the primary purpose of a payroll audit. For instance, creating new payroll software addresses technological improvements rather than reviewing existing payroll processes. Adjusting employee hours for tax purposes could mislead and manipulate records, straying from the audit's intent of ensuring proper compliance. Surveying employee satisfaction with payroll, while valuable for understanding employee perspectives, does not relate to the technical review and verification involved in an audit.