8: Employee costs/Payroll cycle

Question 1

Give first stage of the wages/salaries system and the I/C procedures

Answer 1

1. Calculation of wages, salaries and taxes - starters and leavers are authorised by senior managers.
   - Time sheets or clocking in/out arrangements exist for those paid per - overseen by manager.
   - Qualified staff to calculate payroll and restricted access to the system. (Continuous professional development - CPD, courses re changes in legislation)

Question 2

Give 2nd stage of the wages/salaries system and the I/C procedures

Answer 2

2. Recording of wages and salaries in the accounting system - payroll reconcilliations performed using a control account.

Question 3

Give last stage of the wages/salaries system and the I/C procedures

Answer 3

3. Payment of wages, salaries and taxes - Segregation of duties between those preparing payroll and those distributing payments.
   - Cash payments need identification prior to payment, BACs need a review and authorisation