Question

Payroll System

Adam & Co’s employees record their hours worked on time cards every day. Their supervisors review the time cards for correctness and submit them to the payroll department at the end of each week. Using a computer terminal connected to the central payroll system, which is located in the data processing department, the payroll clerk inputs the time card data, prints hard copies of the pay cheques, print two copies of the payroll register, and posts to digital employee records. The payroll clerk files the time cards in the payroll department and sends the employee pay cheques to the various supervisors for review and distribution to their respective department employees. The payroll clerk then sends one copy of the payroll register to the accounts payable department, and files the other with the time cards in the payroll department. Page 3 of 5 HA2042 Accounting Information Systems Individual Assignment The accounts payable clerk reviews the payroll register and manually prepares a disbursement voucher. The clerk sends the voucher and the payroll register to the general ledger department. The accounts payable clerk then writes a cheque for the entire payroll and deposits it in the imprest account at the bank. Finally the clerk files a copy of the cheque in the accounts payable department. Once the general ledger clerk receives the voucher and payroll register, the clerk posts to the general ledger from the department computer terminal and files the voucher and payroll register in the department.

required

internal control weeknesees of the Payroll System

Answer 1

Hello, The question states to find the weakness in the system. I shall try to provide the most optimised answer, In case if you are expecting any other modelling or coding, Kindly revert me back.

Weakness in Payroll system:
1. Everything is manual. This may lead to incorrect data in each stage.
For Example: Review done by the Supervisor on time cards and sending a data to clerk. This manual step could be automated with the technology available, which will reduce the workload on supervisor and the manual steps are mostly error prone.
"The payroll clerk then sends one copy of the payroll register to the accounts payable department, and files the other with the time cards in the payroll department." This could always account for making the one's cheque reaches to the other with the similar name and can cause panic in the Employees.
Another example to support this is the process explained in the sentence: "The accounts payable clerk reviews the payroll register and manually prepares a disbursement voucher."

2. Printing could leads to loss of resource in the form of Paper and Printer ink. If the data is to be converted back to digital again, what is the use of printing, two copies. This is flaw which could put a loss to the company and also to the society.

3. Multiple redirections and a lot of process involved. As per the user story described, for a weekly payroll there is a multiple redirections happening, which could leads to data leak. The process is too much and the multiple reviews are done on each step, which could be avoided and a single review at the end can fasten the process. As per process Employee --> Supervisor --> Payroll Clerk --> Payable Clerk--> Bank --> General Ledger Clerk.
Some roles here can be combined and a part of some role can be removed. A supervisor review can be performed together with the review of Payable Clerk, whereas Payroll clerk activity can be automated.

Thank you. If you find any problem with the solution, Kindly revert me back.