Payroll IC - Risk Financial Ghost employees Hours declared...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Risk Financial: Ghost employees Hours declared not equal to hours worked Lack of proper documentation for vacation time. Commissions Compliance of Wage Reports Compliance of Safety Reports Management Control Employees violating company policy Not having properly trained employees which result in training cost and errors and high turnover rate Not compensating employees properly. Internal Control Procedures in Payroll Internal controls for payroll exist to ensure payroll is properly disbursed to the appropriate employees, that it's accurately recorded, and that the relevant legal requirements such as payroll tax deposits are adhered to. Payroll internal control procedures help to establish an effective payroll system, which allows payroll processing and recordkeeping to flow smoothly. 1. Personnel File o The employee's personnel/payroll file should contain his salary, benefits, job status, withholding paperwork (for example, his Form W-4) and his dates of employment. Your company should prepare a personnel handbook outlining the company's vacation , personal, sick leave and holiday policies. You should keep records of benefit days employees have taken to ensure they're complying with your company's policies. Timekeeping o According to the U.S. Department of Labor, Wage and Hour Division, you can implement the timekeeping system of your choice, provided it's accurate and complete. A key aspect of payroll internal control is establishing a timekeeping system. You can use a time clock or a standard weekly time sheet, which the employee must complete. The employee's supervisor or manager must sign the time sheet before submitting it to payroll for processing. The individual who signs the time sheet is not the ideal person to handle payroll processing---a separate individual should be hired for payroll tasks. Payroll Duties o An individual besides the check signer should be assigned with specific payroll duties. This individual would be responsible for holding unclaimed payroll checks, reviewing the payroll register for each pay period, making payroll entries into the
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
general ledger, reviewing payroll tax withholdings, taking care of deposits and filing, and issuing yearly W-2s to employees, plus correcting W-2s, if applicable. Payroll Structure o A separate payroll checking account should be established and maintained. The payroll account should be used for paying employees and making tax payments to the government. Payroll registers should be printed for each payroll detailing employees' wages, taxes withheld, voluntary deductions and check numbers. If your payroll system is manual, payroll disbursements can be incorporated into the cash disbursement journal. You can also have your employees sign the payroll register to show they received their paychecks. Payroll Service
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 7

Payroll IC - Risk Financial Ghost employees Hours declared...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online