The Expenditure

Cycle Part5 II:

Payroll Processing
Member 1 and Fixed Asset
Procedures
Helping Hands
Member of Group

Member 2 Member 3
 PAYROLL
CONTROLS
A form of payroll fraud involves
submitting timecards for employees who
no longer work for the firm. The
personnel action form describes additions,
deletions, and other changes to the
Transaction
employee file and acts as an important
Authorization authorization control to ensure that only
the time cards of current and valid
employees are processed.
Add title here
The time-keeping function
and the personnel function
should be separated.

The personnel function pro

vides payroll with pay rate
Segregation
information for authorized Duties
hourly employees.
 PAYROLL
CONTROLS
Sometimes employees will clock in for
another worker who is late or absent.
Supervisors should observe the time-
keeping process and reconcile the time
cards with actual attendance.
Supervision
 Accounting
Add subtitle... Records
1. Time cards, job tickets, and
2. Journal information,
disbursement vouchers. which comes
from the labor distribution summary
3. Subsidiary
and ledger accounts, which
the payroll register.
contain the employee records and
4. The general
various expenseledger accounts: payroll
accounts.
control, cash, and the payroll clearing
(imprest) account.
Add title here
The assets associated with the
payroll system are labor and
cash. Both can be
misappropriated through
improper access to accounting
records.
Access
Controls
 Independent
Add subtitle... Verification
1. Verification of time. Before sending
time cards to payroll, the supervisor must
verify their accuracy and sign them.
2. Paymaster. The use of an
independent paymaster to distribute
checks (rather than the normal
supervisor) helps verify the existence of
the employees. The supervisor may be
party to a payroll fraud by pretending to
distribute paychecks to nonexistent
 Independent
Add subtitle... Verification
3. Accounts payable. The AP clerk
verifies the accuracy of the payroll
register before creating a disbursement
4. General
voucher thatledger.
transfersThe general
funds to the ledger
imprest
department
account. provides verification of the
overall process by recon ciling the labor
distribution summary and the payroll
disbursement voucher
Manual Payroll System
1. Payroll authorization and hours worked enter the
payroll department from two different sources:
personnel and production.
2. The payroll department reconciles this information,
calculates the payroll, and distributes paychecks to the
employees.
3. Cost accounting receives information regarding the
time spent on each job from production. This is used
for posting to WIP account.
Member 1
 Polaroid is a type
of camera which
uses self-
developing film to
create a
chemically
developed print
Member 1 shortly after taking
Member 1 Member 3
Member 5

Member 2
Member 4
 Polaroid is a
Polaroid is a type of
type of camera which
camera which uses self-
uses self- developing
developing film.
film. Polaroid is a
Polaroid is a type of
type of camera which
camera which uses self-
uses self- developing
developing film.
film. Member 5
Thank You