What is an employee?
For an individual to qualify as an employee, the employer must contain the right to control the manner in which the employee performs their work. In addition, the employer must provider the tools (computer, desk, chair, email, etc.) and facility (office space) for the employee to work in.
In exchange for their efforts, an employee be paid a wage or salary. The employee may also be entitled to benefits and other forms of compensation.
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What type of documentation should the audit team collect for the inventory cycle?
The audit team should collect documentation related to purchasing inventory and selling inventory. When purchasing inventory, the audit team should focus on the voucher package, which is the purchase order, receiving report, and invoice related to a purchase (receieved from supplier/vendor). When a company purchases inventory, that will increase their inventory balance. When a company […]
What is lapping?
Lapping is a fraudulent accounting techniques that occurs when an employee alters the financial records to hide cash stolen from the company. Basically, the employee will take subsequent cash received and apply it to an accounts receivable to cover the theft. The employee must keep up this practice, otherwise the fraud will be discovered. As […]
What is check kiting?
Check kiting is a form of fraud that involves floating checks from one bank account to another. Generally, the objective of check kiting is for the client to attempt to make use of a fund or bank account that might not actually exist.