Question

Distinguish point-of-sale systems from revenue cycles of manufacturing firms.
[15 marks]

b) Discuss the threat of unauthorized changes to the payroll master file and its
consequences.

Answer 1

Requirment 1

In point-of-sale systems, the client factually has ownership of the stuffs bought, thus the inventory is in hand. Normally, for manufacturing firms, the demand is placed and the good is transported to the customer at some future time period. Thus, apprising inventory at the time of sale is essential in point-of-sale systems since the inventory is shifting hands, while it is not essential in manufacturing firms until the goods are in reality shipped to the customer.

Also, POS systems are used broadly in grocery stores, department stores, and other kinds of retail organizations. Mostly, only cash, checks, and bank credit card sales are in force. Not like manufacturing firms, the organization keeps no customer accounts receivable. Unlike some manufacturing firms, inventory is held in reserve on the store's shelves, not in a isolated warehouse. The clients personally pick the items they desire to purchase and carry them to the counter location, where the deal begins. Shipping, packing, bills of lading, etc. are not applicable to POS systems.

Requirment 2

Many complications may result when there are unapproved changes to the payroll master file. Unapproved changes may be made to employee pay rates, causing in the company paying too much in wages. "Ghost" or "phantom" personnel may be added to the payroll master to dissuade reserves to deceitful employees through the issuance of paychecks to such "employees." Similarly, dismissed employees may still be salaried, causing in the deceitful diversion of payroll funds. Two controls that should be executed and preserved to deliver general control of the payroll master file: proper separation of duties and regulatory access to the file. Good internal control commands that only sanctioned HRM personnel be allowed to bring up to date the payroll master file for any appointment, termination, pay raise, and promotion. HRM personnel, who have such right of entry to the payroll master file, should never be permitted to directly join in actual payroll processing or salary distribution. This way an suitable control is created to equal actual paychecks (or earnings statements when direct deposit is in place) with employees when a manager, supervisor, or other third party hand out the checks (or earnings statements). Also, a different individual should approve all changes to the payroll master file in writing other than the individual who endorses or initiates the modifications. User IDs and passwords should always be used to control access to the payroll master file, and an access control matrix should be recognized to outline what actions each official employee is permitted to make and authorizes the files the employee may right of entry.