Professional Documents
Culture Documents
AIS Chapter 6
AIS Chapter 6
Job tickets capture the time that individual workers spend on each
production job. Cost accounting uses these documents to allocate direct
labor charges to work-in-process (WIP) accounts.
Time cards capture the time that the employee is at work. These are sent
to prepare payroll function for calculating the amount of the employees
paycheck.
After cost accounting allocates labor costs to the WIP accounts, the charges
are summarized in a labor distribution summary and forwarded to the
general ledger function.
Payroll Department receives pay rate and withholding data from the
personnel department and hours worked data from the production
department. A clerk in payroll then performs the following tasks:
1. Prepares the payroll register showing gross pay, deductions, overtime
pay, and net pay.
2. Enters then this information into the employee payroll records.
3. Prepares employees paychecks.
4. Sends the paychecks to the distribute paycheck function.
5. Files the time cards, personnel action form, and copy of the payroll
register.
Transaction Authorization
Segregation of Duties
Supervision
Accounting Records
Access Controls
Independent Verification
Independent Verification:
1.
2.
3.
4.
Verification of time
Paymaster
Accounts payable
General ledger
terminate employees
job tickets - account for the time spent by the worker on each
production job
time cards - used to capture the total time worked each pay
period for payroll calculations
must be signed by a supervisor
prepare paychecks
writes a check for the payroll and deposits it into the payroll
imprest account .
Payroll Controls
1. Transaction authorization - the personnel action form helps prevent:
(a)terminated employees from receiving checks , and (b) wage rates
from being improperly changed for current employees
2. Segregation of Duties - timekeeping and personnel functions should
be separated
3. Supervision - need to monitor employees to ensure they are not
clocking in for one another
4. Accounting Records - audit trail includes:
time cards
payroll register
job tickets
subsidiary ledger
accounts
disbursement vouchers
labor distribution
summary
general ledger
accounts
5. Access Controls - need to prevent employees from having improper
access to (a)accounting records, such as time cards which can be
altered, and (b)unsigned checks
6. Independent Verification:
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Control Implications
The strengths and weaknesses of this system are similar to those
in the batch system for general expenditures discussed earlier.
Control Implications
The real-time features of the payroll system provide many of the
operational benefits including reductions in paper, clerical labor,
and the lag time between event occurrences and recording them.
Computer-based systems must produce adequate records for
independent verification and audit purposes. Also, controls must
be implemented to protect against unauthorized access to data
files and computer programs.
The Fixed Asset System
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