Describe Control Procedures (strengths) Related to Payroll Processing
Describe control procedures (strengths) related to payroll processing
Strengths identified (payroll)
Possible test of controls
Segregation of functions
Louise McWhorter notify Donald McKenna of personnel changes.
Review and test clients procedures for changing employees records; if IT application, examine application controls.
Review and test personnel files
Segregation of duties
Cheryl Palmer does not have any responsibilities to prepare payroll or have access to the payroll records.
Observe and evaluate proper segregation of duties.
Segregation of functions
Time clock are employed for hourly employees.
Observe employees use of time clock
Segregation of duties
Time cards and time reports approved by various supervisors.
Inspect time cards presented for approval by supervisor.
Authorization
All hires and terminations approved by Larry Lancaster.
Review and test clients authorization procedures for each point of authorization in the payroll cycle; if IT application, examine application controls.
Authorization
All wage rates are approved by president initials.
Observation and direct examination of the approved wage rates.
Input controls
All checks paid to employees are prenumbered.
Sequence checking the serially number of payroll checks.
Input controls
Cheryl Palmer verifies all payrolls and recalculates for mechanical accuracy in correct amount