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The C
HAPTER Human Resources Management/Payroll Cycle
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INTRODUCTION
Questions to be addressed in this chapter include:
What are the basic business activities and data processing operations that are performed in the human resources management (HRM)/payroll cycle? What decisions need to be made in this cycle, and what information is needed to make these decisions? What are the major threats and the controls that can mitigate those threats?
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INTRODUCTION
The HRM/payroll cycle is a recurring set of business activities and related data processing operations associated with effectively managing the employee workforce.
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INTRODUCTION
The more important tasks performed in the HRM/payroll cycle are:
Recruiting and hiring new employees Training Job assignment Compensation (payroll) Performance evaluation Discharge of employees (voluntarily or involuntarily)
Payroll costs are also allocated to products and departments for use in product pricing and mix decisions.
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INTRODUCTION
The most important tasks performed in the HRM/ payroll cycle are:
Recruiting and hiring new employees Training These two tasks are normally done only once Job assignment for each employee. Compensation (payroll) Performance evaluation Discharge of employees (voluntarily or involuntarily)
Payroll costs are also allocated to products and departments for use in product pricing and mix decisions.
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INTRODUCTION
The most important tasks performed in the HRM/ payroll cycle are:
Recruiting and hiring new employees Training These tasks are done Job assignment repeatedly as long as the employee works for Compensation (payroll) the company. Performance evaluation Discharge of employees (voluntarily or involuntarily)
Payroll costs are also allocated to products and departments for use in product pricing and mix decisions.
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INTRODUCTION
The most important tasks performed in the HRM/ payroll cycle are:
Recruiting and hiring new employees Training In most companies these six Job assignment activities are split between a payroll system and an HRM Compensation (payroll) system. Performance evaluation Discharge of employees (voluntarily or involuntarily)
Payroll costs are also allocated to products and departments for use in product pricing and mix decisions.
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INTRODUCTION
The most important tasks performed in the HRM/ payroll cycle are:
Recruiting and hiring new employees Training The payroll system handles Job assignment compensation and comes under the purview of the controller. Compensation (payroll) Performance evaluation Discharge of employees (voluntarily or involuntarily)
Payroll costs are also allocated to products and departments for use in product pricing and mix decisions.
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INTRODUCTION
The most important tasks performed in the HRM/ payroll cycle are:
Recruiting and hiring new employees Training The HRM system handles the other five tasks and comes Job assignment under the purview of the director Compensation (payroll) of human resources. Performance evaluation Discharge of employees (voluntarily or involuntarily)
Payroll costs are also allocated to products and departments for use in product pricing and mix decisions.
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INTRODUCTION
In this chapter, well focus primarily on the payroll system:
Accountants are traditionally responsible for its function. Must be designed to meet:
Managements needs. Government regulations.
Incomplete or erroneous payroll records:
Impair decision making. Can result in fines and/or imprisonment.
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INTRODUCTION
The design of the HRM system is also important because the knowledge and skills of employees are valuable assets, so HRM systems should:
Help assign these assets to appropriate tasks; and Help monitor their continuous development.
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INTRODUCTION
There are five major sources of input to the payroll system:
HRM department provides information about hiring, terminations, and pay-rate changes. Employees provide changes in discretionary deductions (e.g., optional life insurance). Various departments provide data about the actual hours worked by employees. Government agencies provide tax rates and regulatory instructions. Insurance companies and other organizations provide instructions for calculating and remitting various withholdings.
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INTRODUCTION
Principal outputs of the payroll system are checks:
Employees receive individual paychecks. A payroll check is sent to the bank to transfer funds from the companys regular account to its payroll account. Checks are issued to government agencies, insurance companies, etc., to remit employee and employer taxes, insurance premiums, union dues, etc.
The payroll system also produces a variety of reports.
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INTRODUCTION
Organizational success depends on skilled and motivated employees:
Their knowledge and skills affect quality and quantity of goods and services. Labor costs are a major expense in generating revenues and a key cost driver.
The traditional AIS has not measured or reported on the status of a companys human resources:
Financial statements do not regard employees as assets. Under GAAP, the value of human services is not measured until they have been consumed.
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INTRODUCTION
In the 1990s companies began creating positions for a director of intellectual assets with responsibilities for developing and managing intellectual assets. Some may even include HR info in their annual report, including reports on:
Human capital: The knowledge employees possess, which can be enhanced. Intellectual capital: The knowledge thats been captured and implemented in decision support systems, expert systems, or knowledge databases, so that it can be shared.
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INTRODUCTION
Because employees are so valuable, turnover is expensive:
Average cost of replacement is 1.5 times the employees annual salary. Turnover rates need to be managed so theyre not excessive.
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INTRODUCTION
Employee morale is also important
Bad morale leads to high turnover. Employee attitudes affect customer interactions and are positively correlated with profitability. Employees need to:
Believe they have the opportunity to do what they do best. Believe their opinions count. Believe their coworkers are committed to quality. Understand the connection between their jobs and the companys mission.
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INTRODUCTION
To effectively track intellectual capital and human resources, the AIS must do more than just record time and attendance and prepare paychecks. Payroll should be integrated with HRM so management can access data about employee-related costs and employee skills and knowledge.
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PAYROLL CYCLE ACTIVITIES
Lets take a look at payroll cycle activities. The payroll application is processed in batch mode because:
Paychecks are issued periodically. Most employees are paid at the same time.
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PAYROLL CYCLE ACTIVITIES
The seven basic activities in the payroll cycle are:
Update payroll master file Update tax rates and deductions Validate time and attendance data Prepare payroll Disburse payroll Calculate employer-paid benefits and taxes Disburse payroll taxes and miscellaneous deductions
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PAYROLL CYCLE ACTIVITIES
The seven basic activities in the payroll cycle are:
Update payroll master file Update tax rates and deductions Validate time and attendance data Prepare payroll Disburse payroll Calculate employer-paid benefits and taxes Disburse payroll taxes and miscellaneous deductions
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UPDATE PAYROLL MASTER FILE
The HRM department provides information on new hires, terminations, changes in pay rates, and changes in discretionary withholdings. Appropriate edit checks, such as validity checks on employee number and reasonableness tests are applied to all change transactions. Changes must be entered in a timely manner and reflected in the next pay period. Records of terminated employees should not be deleted immediately as some year-end reports (e.g., W-2s) require data on compensation for all employees during the year.
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PAYROLL CYCLE ACTIVITIES
The seven basic activities in the payroll cycle are:
Update payroll master file Update tax rates and deductions Validate time and attendance data Prepare payroll Disburse payroll Calculate employer-paid benefits and taxes Disburse payroll taxes and miscellaneous deductions
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UPDATE TAX RATES AND DEDUCTIONS
The payroll department receives notification of changes in tax rates and other payroll deductions from government agencies, insurers, unions, etc. These changes occur periodically.
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PAYROLL CYCLE ACTIVITIES
The seven basic activities in the payroll cycle are:
Update payroll master file Update tax rates and deductions Validate time and attendance data Prepare payroll Disburse payroll Calculate employer-paid benefits and taxes Disburse payroll taxes and miscellaneous deductions
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VALIDATE TIME AND ATTENDANCE DATA
Information on time and attendance comes in various forms depending on the employees pay scheme.
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VALIDATE TIME AND ATTENDANCE DATA Most employees are paid either on an hourly basis or a fixed salary.
Many companies use a time card to record their arrival and departure time.
This document typically includes total hours worked during a pay period.
Manufacturing companies may use job time tickets to record not only time present but also time dedicated to each job.
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VALIDATE TIME AND ATTENDANCE DATA
Employees that earn a fixed salary, e.g., managers and professional staff:
Usually dont record their time, but supervisors informally monitor their presence. Professionals in accounting, law, and consulting firms must track their time on various assignments to accurately bill clients.
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VALIDATE TIME AND ATTENDANCE DATA
Sales staff are often paid on a straight commission or base salary plus commission. Some may also receive bonuses for surpassing sales targets.
Requires careful recording of their sales.
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VALIDATE TIME AND ATTENDANCE DATA
Increasingly, laborers may be paid partly on productivity. Some management and employees may receive stock to motivate them to cut costs and improve service.
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VALIDATE TIME AND ATTENDANCE DATA
The payroll system needs to link to the revenue cycle and other cycles to calculate these payments. Its also important to design bonus schemes with realistic, attainable goals that:
Can be measured Are congruent with corporate objectives Are monitored by management for continued appropriateness Are legal
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VALIDATE TIME AND ATTENDANCE DATA
Accountants and compensation policies
Recent corporate scandals have led to scrutiny and criticism of executive compensation plans:
FASB issued new rules requiring that stock options be expensed. Major U.S. stock exchanges now require companies to obtain shareholder approval of stock compensation.
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VALIDATE TIME AND ATTENDANCE DATA
Compensation boards are being created to design compensation plans, rather than having executives create their own. Accountants can help by:
Advising on financial and tax effects of proposals. Identifying appropriate metrics to measure performance. Enabling compliance with legal and regulatory requirements. Suggesting appropriate public disclosures.
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VALIDATE TIME AND ATTENDANCE DATA How can information technology help?
Collecting time and attendance data electronically, e.g.:
Badge readers Electronic time clocks Data entered on terminals Touch-tone telephone logs
Using edit checks to verify accuracy and reasonableness when the data are entered.
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PAYROLL CYCLE ACTIVITIES
The seven basic activities in the payroll cycle are:
Update payroll master file Update tax rates and deductions Validate time and attendance data Prepare payroll Disburse payroll Calculate employer-paid benefits and taxes Disburse payroll taxes and miscellaneous deductions
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PREPARE PAYROLL The employees department provides data about hours worked. A supervisor confirms the data. Pay rate information is obtained from the payroll master file.
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PREPARE PAYROLL
Procedures:
The payroll transaction file is sorted by employee number (same sequence as master file). For each transaction, the payroll master file is read for pay rates, etc., and gross pay is calculated.
Hourly employees: Gross pay = (hours worked x wage rate) + Overtime + Bonuses Salaried employees: Gross pay = Annual salary x Fraction of year worked
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PREPARE PAYROLL
Payroll deductions are summed and subtracted from gross pay to obtain net pay. There are two types of deductions:
Payroll tax withholdings Voluntary deductions
Year-to-date totals for gross pay, deductions, and net pay are calculated, and the master file is updated. Cumulative records are important because:
Social Security and other deductions cease or decline at certain levels. The information will be needed for tax reports.
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PREPARE PAYROLL
The following are printed:
Paychecks for employeesoften accompanied by an earnings statement, which lists pay detail, current and year-to-date. A payroll register, which lists each employees gross pay, deductions, and net pay in a multicolumn format:
Is used to authorize the transfer of funds to the companys payroll bank account. May be accompanied by a deduction register, listing miscellaneous voluntary deductions for each employee.
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PREPARE PAYROLL
As payroll transactions are processed, labor costs are accumulated by general ledger accounts based on codes on the job time tickets.
The totals for each account are used as the basis for a summary journal entry to be posted to the general ledger.
Other payroll reports and government reports are produced.
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PAYROLL CYCLE ACTIVITIES
The seven basic activities in the payroll cycle are:
Update payroll master file Update tax rates and deductions Validate time and attendance data Prepare payroll Disburse payroll Calculate employer-paid benefits and taxes Disburse payroll taxes and miscellaneous deductions
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DISBURSE PAYROLL
Most employees are paid either by:
Check Direct deposit In some industries, such as construction, cash payments may still be made, but does not provide good documentation
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DISBURSE PAYROLL
Procedures:
When paychecks have been prepared, the payroll register is sent to accounts payable for review and approval. A disbursement voucher is prepared to authorize transfer of funds from checking to the payroll bank account.
For control purposes, checks should not be drawn on the companys regular bank account A separate account is created for this purpose.
Limits the companys loss exposure. Makes it easier to reconcile payroll and detect paycheck forgeries.
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DISBURSE PAYROLL
The approved disbursement voucher and payroll register are sent to the cashier. The cashier:
Reviews the documents. Prepares and signs the payroll check to transfer the funds. Reviews, signs, and distributes employee paychecks (which separates authorization and recording from distribution of checks). Re-deposits unclaimed checks in the companys bank account. Sends a list of these paychecks to internal audit for investigation.
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DISBURSE PAYROLL
Returns the payroll register to payroll department, where it is filed with time cards and job time tickets. Sends the disbursement voucher to accounting clerk to update general ledger.
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DISBURSE PAYROLL
Efficiency opportunity: Direct deposit
Direct deposit can improve efficiency and reduce costs of payroll processing.
Employee a receives copy of the check and an earnings statement. Each bank receives a record of the payroll deposits for that bank via EDI. The record includes:
Employee number Social security number Bank account number Net pay amount
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DISBURSE PAYROLL
Savings occur because:
While the cashier does authorize release of funds, he/she does not sign each check. Eliminates costs of buying, processing, and distributing paper checks. Eliminates postage.
Additional costs:
Elimination of float between when check is distributed and when it is deposited by employee.
Savings typically outweigh costs.
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PAYROLL CYCLE ACTIVITIES
The seven basic activities in the payroll cycle are:
Update payroll master file Update tax rates and deductions Validate time and attendance data Prepare payroll Disburse payroll Calculate employer-paid benefits and taxes Disburse payroll taxes and miscellaneous deductions
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CALCULATE EMPLOYER-PAID BENEFITS AND TAXES The employer pays some payroll taxes and employee benefits directly.
The employer withholds federal and state taxes from employee paycheck, along with Medicare tax, and the employees share of Social Security. May also withhold voluntary deductions such as union dues, United Way contributions, credit union savings, retirement contributions, etc.
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CALCULATE EMPLOYER-PAID BENEFITS AND TAXES In addition, the employer pays:
A matching amount of Social Security. Federal and state unemployment taxes. The employer share of health, disability, and life insurance premiums, as well as pension contributions.
Some companies offer flexible benefit plans, sometimes called cafeteria-style benefit plans.
These plans offer a menu of options.
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CALCULATE EMPLOYER-PAID BENEFITS AND TAXES Benefit programs increase the demands on the HRM/payroll system for gathering employee data, disbursing payments and information, etc. Providing access to payroll/HRM information through a company intranet can help reduce costs.
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PAYROLL CYCLE ACTIVITIES
The seven basic activities in the payroll cycle are:
Update payroll master file Update tax rates and deductions Validate time and attendance data Prepare payroll Disburse payroll Calculate employer-paid benefits and taxes Disburse payroll taxes and miscellaneous deductions
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DISBURSE PAYROLL TAXES AND MISCELLANEOUS DEDUCTIONS The company must periodically prepare checks or EFT to pay tax and other liabilities.
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OUTSOURCING OPTIONS
Many entities outsource payroll and HRM to:
Payroll service bureaus
Maintain the payroll master file and perform payroll processing activities.
Professional employer organizations (PEOs)
Perform the services of the payroll service bureau. Also administer and design employee benefit plans. Generally, more expensive than payroll service bureaus.
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OUTSOURCING OPTIONS
When organizations outsource payroll processing, they send the service bureau or PEO at the end of each period:
Personnel changes. Employee time and attendance data.
The service bureau or PEO then:
Prepares paychecks, earnings statements, and a payroll register. Periodically produces tax documents.
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OUTSOURCING OPTIONS
Outsourcing is especially attractive to small and mid-size businesses because:
Its often cheaper for smaller companies. The bureau or PEO may provide a wider range of benefits. It frees up the companys computer resources for other areas.
However, companies must carefully monitor service quality to ensure that these systems integrate HRM and payroll data in a manner that supports effective management of employees.
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CONTROL: OBJECTIVES, THREATS, AND PROCEDURES
In the HRM/payroll cycle (or any cycle), a well-designed AIS should provide adequate controls to ensure that the following objectives are met:
All transactions are properly authorized All recorded transactions are valid All valid and authorized transactions are recorded All transactions are recorded accurately Assets are safeguarded from loss or theft Business activities are performed efficiently and effectively The company is in compliance with all applicable laws and regulations All disclosures are full and fair
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CONTROL: OBJECTIVES, THREATS, AND PROCEDURES
There are several actions a company can take with respect to any cycle to reduce threats of errors or irregularities. These include:
Using simple, easy-to-complete documents with clear instructions (enhances accuracy and reliability). Using appropriate application controls, such as validity checks and field checks (enhances accuracy and reliability). Providing space on forms to record who completed and who reviewed the form (encourages proper authorizations and accountability).
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CONTROL: OBJECTIVES, THREATS, AND PROCEDURES
Pre-numbering documents (encourages recording of valid and only valid transactions). Restricting access to blank documents (reduces risk of unauthorized transaction).
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CONTROL: OBJECTIVES, THREATS, AND PROCEDURES
Following is a discussion of threats to the HRM/payroll system, organized around three areas:
Employment practices Payroll processing General control issues
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THREATS IN EMPLOYMENT PRACTICES
Objective:
You can click on any of the threats below to get more information on:
The types of problems posed by each threat The controls that can mitigate the threats.
Effectively hire, retain, and dismiss employees.
The major threats in the employment practices area are:
THREAT 1: Hiring unqualified or larcenous empl THREAT 2: Violation of employment law
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THREATS IN EMPLOYMENT PRACTICES
THREAT 1: Hiring unqualified or larcenous employees
Why is this a problem?
Can increase production expenses. Can result in theft of assets. Can result in civil and criminal penalties for the company (e.g., if an employee attempts to make a bribe).
Controls:
State skill qualifications for each position explicitly in the position control report. Ask candidates to sign a statement confirming the accuracy of the information on their application.
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THREATS IN EMPLOYMENT PRACTICES
Recent honesty surveys indicate that 30% of Americans are dishonest, 30% are situationally honest, and 40% are honest. Therefore, ask candidates to consent to a thorough background check of their credentials, employment history, and credit:
You cannot conduct these checks without a written consent. Discard candidates who refuse to consent.
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THREATS IN EMPLOYMENT PRACTICES
Conduct the background checks and verify skills and references, including college degrees earned: Data released in March 2004 indicates that 50% of resumes contain false or embellished information. Check at least three references, and regard it as a negative signal if at least one is not gratuitously positive. Return to Go to
Threat Menu
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THREATS IN EMPLOYMENT PRACTICES
THREAT 2: Violation of employment law
Why is this a problem?
Can result in stiff government penalties as well as civil suits.
Controls:
Carefully document all actions relating to advertising, recruiting, hiring new employees, and dismissal of employees, to demonstrate compliance. Provide employees with continual training to keep them current with employment law.
Return to Threat Menu
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THREATS IN PAYROLL PROCESSING
Objective:
You can click on any of the threats below to get more information on:
Efficiently and The types ofcompensate employees for effectively problems posed by each threat The services provided. controls that can mitigate the threats.
The major threats in the employment practices area are:
THREAT 3: Unauthorized changes to the payroll master THREAT 4: Inaccurate time data THREAT 5: Inaccurate processing of payroll THREAT 6: Theft or fraudulent distribution of paychecks
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THREATS IN PAYROLL PROCESSING
THREAT 3: Unauthorized changes to the payroll master file
Why is this a problem?
Can increase expenses if wages, salaries, commissions, or base rates are falsified. Can result in inaccurate reporting and erroneous decisions.
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THREATS IN PAYROLL PROCESSING
Controls:
Proper segregation of duties:
Only HRM department should be able to update payroll master file. HRM employees should not directly participate in payroll processing or distribution. Prevents the creation of ghost employees and fraudulent checks. Changes to the payroll master file should be reviewed and approved by someone other than the person recommending the change. Department supervisors should receive copies of these documents for review.
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THREATS IN PAYROLL PROCESSING
Restrict logical and physical access to the payroll system:
Utilize user IDs, passwords, and an access control matrix. Control terminals from which payroll data and programs can be accessed.
Return to Threat Menu
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THREATS IN PAYROLL PROCESSING THREAT 4: Inaccurate time data
Why is this a problem?
Can result in payments for services not rendered. Inaccurate or missing checks can damage employee morale. Can result in inaccurate labor reporting.
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THREATS IN PAYROLL PROCESSING
Controls:
Automation can reduce unintentional inaccuracies with:
Badge readers Bar code scanners Online terminals
Data entry programs should include edit checks:
Field checks for employee number and hours worked Limit checks on hours worked Validity checks on employee numbers
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THREATS IN PAYROLL PROCESSING
Segregation of duties can reduce intentional inaccuracies:
People who process payroll should not have access to payroll master file. Supervisors should approve all changes.
Time clock data should be reconciled to job time tickets by an independent party. Supervisors should approve all time cards and job time tickets.
Return to Threat Menu
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THREATS IN PAYROLL PROCESSING
THREAT 5: Inaccurate processing of payroll
Why is this a problem?
Errors damage employee morale, especially if they cause late paychecks. Penalties can accrue if:
Proper payroll taxes are not remitted to the government. Court-ordered paycheck garnishments are not made appropriately.
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THREATS IN PAYROLL PROCESSING
Controls:
Batch totals:
Run and reconcile batch totals before and after processing and at the end of each stage, including hash totals of employee numbers
Cross-footing of payroll register
Make sure that sum of rows equals sum of columns, i.e., total of net pay column should equal total of gross pay minus deduction totals.
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THREATS IN PAYROLL PROCESSING
Payroll clearing account
A general ledger account used in a two-step process:
First step: Payroll control account is debited for amount of gross pay. Cash is credited for net pay. Various liabilities are credited for withholdings. Second step: Cost accounting process distributes labor costs to various expense categories and credits payroll control account for sum of the allocations.
Result should be a zero balance in the control account.
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THREATS IN PAYROLL PROCESSING
Review decisions to hire temporary or outside help to make sure workers are properly classified as employees or independent contractors.
Improper classification can result in significant back taxes, interest, and penalties.
Return to Threat Menu
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THREATS IN PAYROLL PROCESSING
THREAT 6: Theft or fraudulent distribution of paychecks
Why is this a problem?
Payments may be made to fictitious (ghost) or terminated employees, resulting in:
Increased expenses Loss of cash
Controls:
Restrict access to blank payroll checks and check signing machine. All checks should be sequentially pre-numbered and accounted for periodically.
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THREATS IN PAYROLL PROCESSING
Cashier should sign all checks, but only when supported by proper documentation. An imprest payroll bank account should be used. Someone independent of the payroll process should reconcile the payroll bank account. Segregate duties between those who authorize and record payroll and those who distribute checks and transfer funds. Have internal audit observe payroll distribution on a surprise basis. Unclaimed checks should be returned to the treasurers office for prompt re-deposit and should Return to Go to be investigated.
Threat Menu Next Threat
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GENERAL ofTHREATSeach threat. The types problems posed by
The controls that can mitigate the threats.
You can click on any of the threats below to get more information on:
Two general objectives pertain to activities in every cycle:
Accurate data should be available when needed. Activities should be performed efficiently and effectively.
The general threats are:
THREAT 7: Loss, alteration, or unauthorized disc THREAT 8: Poor performance
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GENERAL THREATS
THREAT 7: Loss, alteration, or unauthorized disclosure of data
Why is this a problem?
Loss or alteration of payroll data can result in delayed and/or inaccurate paychecks and reports. Unauthorized disclosure of confidential employee data can violate state and federal laws and damage employee morale.
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GENERAL THREATS
Controls:
Payroll files should be backed up regularly. At least one backup on site and one offsite. All disks and tapes should have external and internal file labels to reduce chance of accidentally erasing important data. Access controls should be utilized: User IDs and passwords. Compatibility matrices. Controls for individual terminals (e.g., so the receiving dock cant enter a sales order). Logs of all activities, particularly those requiring specific authorizations, should be maintained.
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GENERAL THREATS
Default settings on ERP systems usually allow users far too much access to data, so these systems must be modified to enforce proper segregation of duties. Sensitive data should be encrypted in storage and in transmission. Websites should use SSL for secure employee communications. Payroll service bureaus and PEOs can help provide security for data. VPNs should be used to exchange data with service bureaus or PEOs. Parity checks, acknowledgment messages, and control totals should be used to ensure transmission accuracy.
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2008 Prentice Hall Business Publishing
GENERAL THREATS
THREAT 8: Poor performance
Why is this a problem?
May damage employee relations. Reduces profitability.
Controls:
Prepare and review performance reports.
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KEY DECISIONS AND INFORMATION NEEDS
The payroll system should be integrated with cost data and HR information so management can make decisions with respect to the following types of issues:
Future work force staffing needs Employee performance Employee morale Payroll processing efficiency and effectiveness
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KEY DECISIONS AND INFORMATION NEEDS
Benefits of an integrated HRM/payroll model:
Access to current, accurate information about employee skills and knowledge. HRM activities can be performed more efficiently and costs reduced.
EXAMPLE: Employment application terminals in Wal-Mart.
Recruiting costs can be reduced, when applicant data is electronically accessible.
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SUMMARY
Youve learned about the basic business activities and data processing operations that are performed in the HRM/payroll cycle, including recruiting, hiring, training, assigning, compensating, evaluating, and discharging employees. Youve also learned about key procedures in payroll processing. Youve learned how IT can improve the efficiency and effectiveness of these processes.
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SUMMARY
Youve learned about decisions that need to be made in the HRM/payroll cycle and what information is required to make these decisions. Youve also learned about the major threats that present themselves in the HRM/payroll cycle and the controls that can be instigated to mitigate those threats.
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