Topic 7 - Human Resources & Payroll Cycle Flashcards
What are the payroll cycle activities?
- Update payroll master data
- Validate time and attendance data (source document: time sheets)
- Prepare payroll (source document: payroll register and deduction register)
- Disburse payroll
- Disburse taxes and miscellaneous deductions
What are the steps in the Human Resource Management Process?
- Recruit and hire new employees
- Training
- Job assignment
- Compensation (payroll)
- Performance evaluation
- Discharge of employees (voluntary or involuntary)
What are the threats in updating the master payroll data?
- Unauthorized changes to payroll master data
2. Inaccurate updating of master data
What are the controls for unauthorized changes to payroll master data (master payroll data)?
- Access controls and segregation of duties
What are the controls for inaccurate updating of master data (master payroll data)?
- Data processing integrity controls
What are the threats for validating time and attendance data?
- Inaccurate time and attendance data
What are the controls for inaccurate time and attendance data (time and attendance data)?
- Supervisory review
2. Source data automation for data capture
What are the threats for preparing payroll?
- Errors in processing payroll
What are the controls for errors in processing payroll (payroll)?
- Data processing integrity controls
2. Supervisory review
What are the threats for disbursing payroll and payroll taxes?
- Theft or fraudulent distribution of paychecks
- Failure to make required payments
- Untimely payments
- Inaccurate payments
What are the controls for theft or fraudulent distribution of paychecks (disburse payroll)?
- Restrict access to blank payroll checks and check signing machine
- Use separate account (imprest fund)
What are the controls for failure to make required payments (disburse payroll)?
- Configure system to make automatic payments on time.
What are the controls for untimely payments (disburse payroll)?
- Configure system to make automatic payments on time.
What are the controls for inaccurate payments (disburse payroll)?
- Process integrity controls
2. Supervisory review
What are reasons to outsource payroll?
- Reduce costs (cost of processing and minimize errors)
- Broader range of benefits (administration of benefits)
- Free up computer resources
What is the zero check balance?
the payroll clearing account shows a zero balance once all entries are posted
What is a time card?
A document that records the employee’s arrival and departure times for each work shift.
What is a time sheet?
A data entry screen (or paper document) used by salaried professionals to record how much time was spent performing various tasks for specific clients.
What is a payroll register?
A listing of payroll data for each employee for a payroll period.
What is a deduction register?
A report listing the miscellaneous voluntary deductions for each employee.
What is the earnings statement?
A report listing the amount of gross pay, deductions, and net pay for the current period and the year-to-date totals for each category.
What is a payroll clearing account?
A general ledger account used to check the accuracy and completeness of recording payroll costs and their subsequent allocation to appropriate cost centers.
What is the payroll service bureau?
An organization that maintains the payroll master file for each of its clients and performs their payroll processing activities for a fee.
Which department should have responsibility for authorizing pay-rate changes?
Human Resources Management (HRM) because they have no other role in the payroll process.
To maximize effectiveness of internal controls over payroll, which of the following persons should be responsible for distributing employee paychecks?
departmental secretary since they have no other payroll duties so they cannot conceal theft of paychecks.
Where should unclaimed paychecks be returned?
cashier
Online processing is most useful for what payroll task?
making changes in employee benefit choices
