Question

What is a payroll master file? Describe the types of errors that may occur in the master file and how they get there. How would you design payroll procedures to help prevent them?

Answer 1

Payroll master file is a computer file used for recording payroll transactions for each employee and maintaining total wages paid to the employee for the year to date

Error occurred in the master file due to

• Paying fictitious employees
• Paying terminated employees
• Paying to the employees who didn't worked
• employees enter into the master file and making their own payroll according to their convenience

Implement physical access controls such as a file library function to prevent programmers from having unsupervised access to production databases
• Implement authentication and authorization controls such as user ID's, passwords, and access control matrix to limit access to all master files to authorized personnel
• Have supervisors review reports of all changes to payroll master data to detect this type of fraud
• Have the the personnel department maintain a batch total of all salaries and check it against the corresponding total generated during each payroll run as a backup control,
• Batch total of all salaries maintained by the personnel department that is checked against a corresponding total generated during each payroll run