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    Key Controls

    Uploaded by

    Jiya Rajput
    1. The factory uses a numbered clock card system to track employee hours worked for payroll purposes. However, employees can fake clock-in entries for colleagues who are absent, incorrectly increasing payroll costs. 2. Employees are paid for 30 minute breaks but do not clock out, allowing breaks to exceed 30 minutes without supervision. This results in incorrect hours paid. 3. Temporary staff hiring is handled by the production manager rather than HR, risking inappropriate or inefficient hiring.

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    © All Rights Reserved
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    Key Controls

    Uploaded by

    Jiya Rajput
    24 views3 pages
    1. The factory uses a numbered clock card system to track employee hours worked for payroll purposes. However, employees can fake clock-in entries for colleagues who are absent, incorrectly increasing payroll costs. 2. Employees are paid for 30 minute breaks but do not clock out, allowing breaks to exceed 30 minutes without supervision. This results in incorrect hours paid. 3. Temporary staff hiring is handled by the production manager rather than HR, risking inappropriate or inefficient hiring.

    Original Description:

    AAA Answer sheet

    Original Title

    KEY CONTROLS

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    1. The factory uses a numbered clock card system to track employee hours worked for payroll purposes. However, employees can fake clock-in entries for colleagues who are absent, incorrectly increasing payroll costs. 2. Employees are paid for 30 minute breaks but do not clock out, allowing breaks to exceed 30 minutes without supervision. This results in incorrect hours paid. 3. Temporary staff hiring is handled by the production manager rather than HR, risking inappropriate or inefficient hiring.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    24 views3 pages

    Key Controls

    Uploaded by

    Jiya Rajput
    1. The factory uses a numbered clock card system to track employee hours worked for payroll purposes. However, employees can fake clock-in entries for colleagues who are absent, incorrectly increasing payroll costs. 2. Employees are paid for 30 minute breaks but do not clock out, allowing breaks to exceed 30 minutes without supervision. This results in incorrect hours paid. 3. Temporary staff hiring is handled by the production manager rather than HR, risking inappropriate or inefficient hiring.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    KEY CONTROLS:

    1. Factory Staff each is issued a numbered clock card that helps to


    calculate the productive hours resulting in payment made only for
    hours worked also the sequential order followed will help them
    keeping up record for every employee rather than missing it.
    2. Automated system of gross and net salary is reviewed by
    supervisor causing the risk of human error to be minimized.
    3. To avoid discontinuing production HR department hires
    temporary staff and their detailed amounts are reviewed
    quarterly by production supervisor. Segregation of duties will help
    reduce the risk of fake employees’ entries in payroll.
    4. To keep staff motivated plus achieving the given targets bonus is
    awarded to the team that is approved by production supervisor in
    writing. The error of wrong entry is reduced as it’s awarded in
    writing.
    5. To avoid clashes Payroll supervisor rechecks the bank payments
    with the payroll records and respective changes are made on
    time. This will also help in reducing the risk of omitting employees
    and fictitious entries.

    Deficiencies Recommendations
     Employees have a numbered clock card that they swipe Clock cards must only be accessed by the respective o
    before & after their work shifts. & There must be a supervisor to review the entries o
    The certain entries are not supervised that may cause employees, overseeing their working hours by puttin
    the other employees to fake entries of their friend
    colleagues in there absence, resulting in incorrect hours
    of work calculated that are to be paid increasing the
    cost to the company.

     Employees get paid 30 min break also they don’t need Employees should use their clock cards to record the
    to time out during that break there is a possibility that time as well. Furthermore, this entry should also be s
    employees spend more than 30 min because as there is by production manager keeping correct record of hou
    no supervision of their break time. which the employees are paid.

     Temporary staff is hired by production manager to fulfil HR should handle the hiring of temporary staff as we
    the overtime requirement in factory.
    In presence of HR, staff is hired by production manager
    that’d lead to inappropriate hiring also process might
    not be efficiently performed.

     Bonus given to employees is entered by a clerk however A responsible official must review and authorize the w
    no supervision of it is done Clerk might make errors or by the clerk.
    fraudulently enter excessive hours of their mates.
     Factory Staff is paid 80% through bank and remaining Proper record of staff getting cash payments with a c
    hand cash. of their identity should be made. Authorization must
    Cash payments are made without making identity a responsible and high ranked individual like finance
    clearance.
    There is a risk that payments might be paid incorrectly
    and twice as no recordings are taking place.

     Bank payments are reviewed by payroll manager who Duty must be segregated, the one who oversees the
    amends it too at times of need. must be separate from the one who amends it. Autho
    There is lack of segregation of duties that’ll probably and review must take place.
    lead to fraud and data being changed anytime with
    one’s will without authorization.

    Deficiencies Recommendations
     During the physical count of assets internal audit team
    faced significant shortage of staff also the IA team
    members are new shows that they are not much aware
    of business

     To ease the workload of HR, Payroll department is


    working on their behalf.
    Segregation of duties will be violated if hiring of new
    employees is done by payroll. There is a threat that
    payroll manager may hire their friends as they know
    about salary incremental of this year.
     Access to the inventories in warehouses via four digit
    code is same over all the sites, also inventory count is
    not performed causing the system to disrupt and inter
    department fraudulent inventory movement is possible.

     Bank reconciliations are done by accounts clerk and also


    adjustments are done by him. The relevant duty is not
    segregated and might possibly cause errors or fraud.

     In order to maximize cash, Finance director approves


    payable payments after 75 days that is not good for
    business reputation. Supplier may not offer credit
    period next time or may stop giving business supplies as
    well.

     Duty must be segregated, the one who oversees the


    must be separate from the one who amends it. Autho
    and review must take place.

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