Week 2 Assignment from Text – Jamie Oswalt
16-33
a.
The payroll procedures at the Galena plant do contain some shortcomings. The first one is that the supervisors in the production department are not approving actual hours. Another one found is that payroll clerk seems to be in charge of most duties, which clearly signifies a lack of segregation of duties. Finally, the employee from the personnel department should not be the one to have access to the payroll checks and hold them until time for delivery.
In order to fix these shortcomings and improve the internal controls of Galena’s payroll procedures, there are certain changes that should be made. All employees should sign off on ...view middle of the document...
| Ask about and observe procedures for authorizing pay rate changes, confirm deductions with IRS information provided, and examine terminations to make sure that they are not still on the payroll. |
Are time clocks and clock cards used? | Employees could be paid for an incorrect amount of hours. | Observe employees clocking in and out. |
Is there supervisory approval of time worked by each employee? | Employees could be paid for an incorrect amount of hours. | Examine time clock cards to make sure there is supervisor approval. |
Are payroll checks signed and distributed by treasurer office personnel? | Checks could be given to an incorrect employee, terminated employees might still be sent a check, and there is the potential of payment to a fictitious employee. | Observe the payroll distribution process, as well as the process of signing the checks. |
Is there internal verification of payroll checks with payroll register data? | Errors could occur in the process of recording payroll. | Observe data entry procedures and compare to...
