Research Sdn Bhd is a marketing research firm. The company employs an interview manager to control 40 interviewers who conduct interviews with hypermarket customers. The interviewers are paid monthly in arrears for hours worked, with hourly rates and productivity bonus payments being dependent on surveys undertaken. They submit their monthly time sheets to the company’s head office for processing and the company operates a separate monthly payroll specifically for interviewers’ wages. The company’s wages software program produces on request: A master file update report – detailing the update report number, the amendments made since the last report, and the number of existing employees on file. A current period payment details report – showing gross payment, deductions and net payment amounts – by employee and in total. Wage slips – the computerised production of which is requested only after other control procedures employed have ensured that information provided on the current period payment details report (above) is in agreement with a hash total representing gross wages input. The interviews manager is based at the company’s head office, together with the accounting and administration departments. He is responsible for the recruitment of interviewers, deployment to assignments, overseeing of interview work and for the authorisation of pay rates and bonus payments. The company has a good control environment including appropriate segregation of duties throughout the specific areas of the business. Head office employees include a company accountant, a wages supervisor and three wages clerks. Required:

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 2TIF

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Research Sdn Bhd is a marketing research firm.

The company employs an interview manager to control 40 interviewers who conduct interviews with hypermarket customers. The interviewers are paid monthly in arrears for hours worked, with hourly rates and productivity bonus payments being dependent on surveys undertaken. They submit their monthly time sheets to the company’s head office for processing and the company operates a separate monthly payroll specifically for interviewers’ wages. The company’s wages software program produces on request:

A master file update report – detailing the update report number, the amendments made
since the last report, and the number of existing employees on file.
A current period payment details report – showing gross payment, deductions and net
payment amounts – by employee and in total.
Wage slips – the computerised production of which is requested only after other control
procedures employed have ensured that information provided on the current period
payment details report (above) is in agreement with a hash total representing gross
wages input.

The interviews manager is based at the company’s head office, together with the accounting
and administration departments. He is responsible for the recruitment of interviewers,
deployment to assignments, overseeing of interview work and for the authorisation of pay rates
and bonus payments.
The company has a good control environment including appropriate segregation of duties
throughout the specific areas of the business. Head office employees include a company
accountant, a wages supervisor and three wages clerks.
Required:

b) State the internal control procedures that Research Sdn Bhd should adopt over the updating
of its wages master file with regard to interviewer starters and leavers.

Please give explanation in details.

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