UNDERSTANDING PAYROLL CYCLE

What is 1 weakness that you can identify from this payroll system?

• The terms of employment was just being briefed by the operations manager

• It is such a hassle that applicant need to undergo a medical check up

• Recruitment are conducted through walk-in interview, not an online interview

• Job interview would be conducted by the operations manager only

Job interview would only be conducted by the operations manager. What could be a potential misstatement when the recruitment was only handled by the operations people? (More than 1 answer)

• The operations manager

  might be biased in approving

  the job applications

• He might easily

  accept application from

  person that is not competent but that has

  family relationship with him

• There might be error in payroll calculation

What 1 weakness that you can identify from the internal payroll control system?

• The operation manager inform HR manager through an e-mail

• Employment letter is only issued to employee who successfully undergone the probationary period

• HR manager is the one to update the new employment detail in the employee database system

• a 24-hour written notice is a very short notice

Employment letter is only issued to employee who successfully undergone the probationary period. What would be a good recommendation for this control weakness over the issuance of employment letter?

• Employment letter

  should be issued to every

  employee as it detailed out the term of engagement

• There is no need to issue an employment letter as it consumes a lot of papers

• Employment letter should only be issued to those that did not successfully undergone the probationary period

What 1 weakness that you can identify from this paragraph on payroll system?

• The company uses software for attendance recording instead of people to record

• The attendance keyed in by the employee is checked at month end

• HR clerk is in charge of updating in the computerised attendance system

What could be potential misstatement/(s) if there is no monitoring or authorization over the recording of hours worked by supervisor or official? ( can be more than 1 answer)

• Employee might manipulate the

  records of time-in and time-

  out

• Salary might be paid for

  fictitious work hours

• The employee might record

  the attendance of an absent

  employee on behalf of them

What 1 weakness you can identify from the paragraph over the payroll calculation process?

• It should not be the payroll clerk who can extract data from the system

• The credit transfer form is authorized by 2 persons, the Accountant and the Finance Director. It is waste of time

• Once payroll clerk prepare the payroll master schedule, it is handed over to the accounts clerk

Identify areas for recommendation from this paragraph

Answer explanation

1. Pay slip should be issued to all workers upon payroll payment, not upon request or selective. So that when employee check the payslip, any error could be detected

2. Bank reconciliation should be prepared every month, not on quarterly basis. too late to discover error by then