acc_492_week_1_individual_assignme...

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ACC492 Week 2 individual

16-33

a. Shortcoming: The supervisors do not verify hours for payroll. This allows employees to

falsify hours by clocking in and/or out for one another.

Corrective action: Supervisors need to continually monitor the hours employees work,

employees who have quit or have been fired, the hours employees call in sick, and have

vacation time.

Shortcoming: The payroll clerk can void an employee’s payroll check and rewrite it.

Corrective action: When error is discovered the employee should be required to return

the check with errors to the data processing department along with any documentation of

existing errors and ask for a new check.

Shortcoming: Lack of segregation of duties exists.

Corrective action: The company should have more than one employee who works in

the payroll department. Payroll clerks should work independently from the accounting

and data processing departments. Different duties should be given to each payroll clerk;

the duties should be rotated periodically.

b. Weakness

1. Supervisor needs to supply documentation sheets with time cards containing

information of employee’s name, hours worked, hourly rates or salary, and the

department where the employee works. This allows for information to be correct

such as employee names, accurate hours worked, hourly wages, if the employee has

been transferred from one department to another with hourly rate changes. Time cards

for supervisors should be turned in by their superior if paid an hourly wage.

2. Lack of segregation of duties. Payroll clerk is responsible for checking employee’s

hourly rates, the recording of employee hours, comparing checks to the payroll

amounts of payroll checks. There should be a rotation of duties with the payroll

supervisor given authorization before any payroll checks can be printed. The process

that is now in place allows misstatements in payroll without the proper segregation of

duties.

3. The processing department gives the payroll clerk the signature plate so checks

containing errors can be remade. The data processing department should not release

the signature plate to anyone. Original checks that have errors along with proof of the

errors should be returnedbefore a new check can be made. Checks should be

numbered and locked in a secure location until needed, and then they should be

signed out. The supervisor should be the only person to have access to the blank

checks until they are signed out. Misstatements due to overpayments in payroll can

affect the company’s revenue.

4. Accounting, data processing, and payroll departments all work together. Each

department should have distinct duties. Information dealing with payroll should be

approved and signed off on by the department supervisor before passed to the next

department. This helps elevate misstatements in payroll.

5. When the payroll is completed by the payroll clerk, the payroll register should go to

the accounting department. The information for payroll needs to be verified and

transferred to the data processing department so payroll checks can be printed. This

will help stop possible misstatements and the need to change the payroll register after

payroll checks are printed, it can also eliminate fake employees.

6. Printed checks should not be received by the payroll clerk. The checks should go to

the HR department and they will distribute the checks, employees should sign for the

checks upon receipt if there is an error. If an error is found and proven, a new check

should be reissued. This can end the distribution of checks to incorrect employees,

checks issued to non-existent employees, misstatements of over payments.

7. The HR should be the only department with that can change an employee’s pay rate.

Software used by the payroll clerk should have the set employee’s hour rate set. The

hours from employee time cards should be the only thing a payroll clerk needs to

enter into the software. This eliminates misstatement from unauthorized personnel

altering employee pay rates.

8. All departments payroll should not be done by one payroll employee. The duties

should be divided between different employees and rotated occasionally. This can

stop fraud caused by payroll clerks. It is possible for misstatements to happen when

one employee is working with another employee to change data.

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ACC492 Week 2 individual 16-33 a. Shortcoming: The supervisors do not verify hours for payroll. This allows employees to falsify hours by clocking in and/or out for one another. Corrective action: Supervisors need to continually monitor the hours employees work, employees who have quit or have been fired, the hours employees call in sick, and have vacation time. Shortcoming: The payroll clerk can void an employee’s payroll check and rewrite it. Corrective action: When error is discovered the employee should be required to return the check with errors to the data processing department along with any documentation of existing errors and ask for a new check. Shortcoming: Lack of segregation of duties exists. Corrective action: The company should have more than one employee who works in the payroll department. Payroll clerks should work independently from the accounting and data processing departments. Different duties should be given to each payroll clerk; the duties should be rotated periodically. b. Weakness 1. Supervisor needs to supply documentation sheets with time cards containing information of employee’s name, hours worked, hourly rates or salary, and the de ...
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