Trombone Co's payroll system deficlencles, controls and test of controls

Deflciencies Conols Test 0f contols

The wages calculatlons are generatel___ A senlor member øfthe payroll team Review a
sample ofthe gœssto net
by the p2yIoll s/stam and there are no _ should recalculate the gfoss to net pay _
pay calculatlonsfor eidence that they
checks performed. Wotkings for a sample of employees _ _ are undertaken and signed
as

and compare their resuIts to the oufput appfoved.

fom the payroll s/stem. These

calculatlons should be signed 4s

4pproved before payments are mae.

Therefofe, f system eHos occur during.

the payfoll pIocessing, thỉs would not
be identified. Thịs could result In wages
being øef or uInder calculated, leading.
to an adtdtlonal payroll cost or loss of
employee goodwil

Annual wages Increases are updated in. Payrollclerks shoultd not have access to Ask
a cletk to atfempt to make a
the payoll s/stam standing data by standing data changas win the change to payroll
standing data; the
clerks. s/stem. 5stem should reject this aflemgpt.

Payroll clefks are not senlor enough fo _. The annual wags increase should be
Revlew the log df standing data

be making changes to standing data a9 _ performed by a senlor member of the _

amendmentsto identify whether the
they could make mistakes leading to payroll department and this shoull be wage
rate increases were changed by a
Incotfec† payment of wages. In checked by another responsible øfficlal _ senlor
member of payroll

additlon, lf they can access standing_ for arrors

đata, they could make unauthiotised

changes.

Owertime worked by employees ls not __ AII oveftime hours worked should be _..
Review a sample of employee Weekhy
all authorisedl by the relevantt authorised by the relevant department øwertime
sheets for evidence of
department head, as only oerflme In head. This should be evidenced by signature by
relevant depaftment head
©xCess d[ 3056 0ƒ stanlđard houIrs Signatuie on the employees weekly

eqlfes authorisatlon. owertlme sheets

Thịs Increases the risk that employees

Wll clalm for overtime even though
they dd not wofk these adtlilonal
hours resulting In adtdtlonal payrol!

cosls for Trombone.

Time taken dff as payment for ơ/ertlme _ Payrollclerks should be reminded of

Selecta sample of oveflime sheets wfth
Woiked should be agreed by payroll the proceduresto be underfaken when__ tìme taken
off and confirm that there ls
clerks to the oveitlme worked report; _ processing the øvertime sheets. They__
evidence ofa check by the payroll clerk
hơwever, thls has not always occurred._ should sign as evidence on the {0 the
0vetlme Wofked teport

owertlme sheets that they have agreed

any time taken off to the relevant
ØWerflme tepot

Employees could be takingr

unauthorised leave if they take time offF'
bưt have not worked the requirel

0wertlme.

The overtime worked report is emalled AII department heads shoult repot to. For a
ample of overtime reports

†o the department heads and they the payoll department on whether or. emalled to
department heads confirm
eport by exceptlon If thete ae any_ not the ovetime reportis cotrect. The _ thata
response has been received ftom
etroR, Payroll department should follow tp ơn _ each head by reviewing all
tesponses

any nor-replles and not make

Payments untll agreed by the
department head.

If department heads are busy or do not

teceive the email and do not report t0
p2yroll on time, then Ít wll be assumed
hát the oertlme report is cortect even
though there may be erors. Thịs could
esult in the payroll department making
Incotrect overtIme payments.

Department heads are meant to Department heads should be reminded Discuss with
payroll clerks the process
2trange for annual leave cover so that. of the procedures with regards to thiey
follow for obtaining authorEstlon
owertlme sheets are authorised on a _.... annual leave and atrangement of of
oertlme sheets, In patticular during.
timely basis; however, thÌs has not sultable cơw. perlods of annual leave. Compare
thịs

always happened. 0 the process which they should adopt

Dung annual 6zue peledề, P2MÌ.. LiJom any contol exceptions.

If overtime sheets are authorised late, __ clerks should monitor that overtime

then thịs can lead to employee sheets are belng submittlel bự

dlseatisfactlon as it wll delay payment _ department heads on a timely baSis
of the oVeftime woiked and follow up any late sheets

The finance diector reviews the total The finance diiector wien authorising_.
Obtain a sample of payments list and
IEt of bank transfars with the total to be. the payments should on a sample basis
review for signature by the finance
pald per the payroll tecords. perform checks from paroll records to _ director as
evidence that the contol is
Payment list and vice versa to conflrm __ operating coiectt

long with ictflous employees added___ 12L P2Vm»TS are complde and only
to thẻ payment Iiting, so that athough__ T14đe to bona fiđe employees.

the tofal payments llt agrees to payroll- The finance director should sign the
totalS, theïe could be fraudulent Payments Iist as evidence that he has
payments being made. undertaken theo check.

There could be employees omitted