IS 414 CH. 15 (System and Threats)

Question 1

General issues in HRM/Payroll

Answer 1

4. Hiring underqualified or larcenous employees
5. 1 Sound hiring procedures, including verification of job applicants’ credentials, skills, references, and employment history
6. 2 Criminal background investigation checks of all applications for finance-related positions
7. Violations of employment laws
8. 1 Thorough documentation of hiring, performance evaluation, and dismissal procedures
9. 2 Continuing education on changes in employment laws

Question 2

Payroll Cycle Activities

Answer 2

update payroll master data
validate attendance data
prepare payroll
disburse payroll
disburse payroll taxes and misc deductions

Question 3

Payroll

Answer 3

5 major inputs into the payroll system: 
HRM
Various Departments
Government
Employee
Insurance and other Companies

Question 4

Update payroll master data threats

Answer 4

6. Unauthorized changes to payroll master data
7. 1 Segregation of duties
8. 2 Access controls
9. Inaccurate time and attendance data
10. 1 Data processing integrity controls
11. 2 Regular review of all changes to master payroll data

Question 5

Validate time and attendance data threats

Answer 5

8. Inaccurate time and attendance data
9. 1 Source data automation for data capture
10. 2 Biometric authentication
11. 3 Segregation of duties (reconciliation of job-time tickets to time cards)
12. 4 Supervisory review and approve time cards and job-time tickets

Question 6

Prepare payroll threats

Answer 6

9. Errors in processing payroll
10. 1 Data processing integrity controls: batch totals (most likely forgot to process payment for employee), cross-footing of the payroll register, use of payroll clearing account and zero balance check
11. 2 Supervisory review of payroll register and other reports
12. 3 Issuing earnings statements to employees
13. 4 Review of IRS guidelines to ensure proper classification of workers as either employees or independent contractors

Question 7

Disburse payroll threats

Answer 7

10. Theft or fraudulent distribution of paychecks
11. 1 Restriction of physical access to blank payroll checks and the check signature machine
12. 2 Restriction of physical access to the EFT system
13. 3 Prenumbering and periodically accounting for all payroll checks and review of all EFT deposit transactions
14. 4 Require proper supporting documentation for all paychecks
15. 5 Use of a separate checking account for payroll, maintained as an imprest fund
16. 6 Segregation of duties
17. 7 Restriction of access to payroll master data
18. 8 Verification of identity of all employees receiving paychecks
19. 9 Redepositing unclaimed paychecks and investigating cause

Question 8

Disburse payroll taxes and misc. deductions threats

Answer 8

11. Failure to make required payments
12. 1 Configuration of system to make required payment using current instructions from IRS
13. Untimely payments
    same as above
14. Inaccurate payments
15. 1 Processing integrity controls
16. 2 Supervisory review of reports
17. 3 Employee review of earnings statement

Question 9

Payroll service bureaus and professional employer organization attractive to small-midsized businesses

Answer 9

1. reduced costs
2. wider range of benefits
3. freeing up of computer resources