Overtime and Comments Working Paper

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Part A
Employment
Internal Control WeaknessSpecific risk of fraud or error
Weakness of authorization procedures, According to case, Miss Knag call Simon Black to advise him on the relevant salary or wage to be paid to that employee.The risk is new employees would be higher than normal ones. In addition, it may give the leader a chance to add the employees who do not actually on work in order to cheat the money from company. Weakness of authorization procedures According to case, company has appointed many new staff members but has not improved its payroll system to cope with the extra demands placed on it. The risk is there is not enough evidence for the new payroll system; it will be confused and made the mistakes. Weakness of segregation of functions. According to case, the factory just has one person to hire or reject the applicantsThe risk is Fictitious employees may be added to the payroll. In addition, It will give chance to the factory overseer to hire the person without competence for the job but relate to the overseer.

Timekeeping
Internal Control WeaknessSpecific risk of fraud or error
Weakness of physical control, According to case, employee collects a timecard from an unlocked box which is located just within the main door.The risk is unlocked box to store timecard would be easy for employees to stead and to alternate the time card, write more times in the timecard. The result is company will pay more money on basis salary and overtime payment. Weakness of authorization procedures, According to case, two 8 hours shifts that at the end of first shift and at the beginning of second shift happen at the same time.The risk is the record would be uncorrected. Employees would make the longer time in the record than their performance; the company will suffer a loss. Weakness of Segregation of duties, According to case, the employees write down their hours worked for each shift as well as any overtime hours.The risk is the employees could make the worry record by themselves, so that they can get more salary or bonus. Weakness of Documentation procedures. According to case, Employees names and their numbers are pre-printed on the timecard.The risk is the employees’ information would not match with the computer’s record, because sometimes the dada entry will has mistakes. Weakness of physical control and authorization procedures, According to case, the employee must return their timecard to the box outside the main factory entrance on Friday.The risk is The timecard box is outside the entrance of the factory, the unauthorized person can access the box, and in addition people outside the company could access that. Furthermore, employee would keep the timecard during a week, they could change the record on the card. Weakness of Documentation procedures and physical control. According to case, Mr. Blake collects the timecard on next Monday morningThe risk is the time of recording wages expense would appear in the wrong period, in addition, it will give the employees has chance to make some change or steal the timecard. Weakness of segregation of function. According to case, the end of the first shift and the start of the second shift are at the same timeThe risk is the record should be easy to make to mistakes. Which the employee is going to work or rest. Weakness of physical control and authorization procedures, Staff include meal and coffee breaks within the hours workedThe risk is the timecard does not record break times, the employees will slack their duty. Weakness of segregation of duties. According to case, the employees must return their completed timecards to the box.The risk is company has not an independent to record the worked hours; furthermore, no personnel to supervise or review the record of the worked hours, therefore the accuracy will be low.

Payroll data entry
Internal Control WeaknessSpecific risk of fraud or error
Weakness of authorization procedures, According to case, Mr....
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