Internal control: Internal control is a process which ensures continuous reliability of accomplishment of a company’s objectives, related to operations, financial reporting, and in conformity with laws and regulations. The following are the principles of internal control: Authorizing the responsibility Segregation of duties Documenting and recording transactions Physical controls Periodic independent verification Human resource controls Payroll: The total payment that a company is required to pay to its employee for the services received is called as payroll. To Identify: Whether Restaurant B has internal controls to catch the payroll error.

Question

Payroll Internal Control Procedures Big Howie's Hot Dog Stand is a fast-food restaurant specializing in hot dogs and hamburgers. The store employs 8 full-time and 12 part-time workers. The store's weekly payroll averages $5,600 for all 20 workers. Big Howie’s uses a personal computer to assist in preparing paychecks. Each week, the store’s accountant collects employee time cards and enters the hours worked into the payroll program. The payroll program calculates each employee’s pay and prints a paycheck. The accountant uses a check-signing machine to sign the paychecks. Next, the restaurant’s owner/ manager authorizes the transfer of funds from the restaurant’s regular bank account to the payroll account. For the week of May 12, the accountant accidentally recorded 100 hours worked instead of 40 hours for one of the full-time employees. Does Big Howie's Hot Dog Stand have internal controls in place to catch this error? If so, how will this error be detected?

Answer 1

Question

Chapter 10, Problem 14E

To determine

Internal control: Internal control is a process which ensures continuous reliability of accomplishment of a company’s objectives, related to operations, financial reporting, and in conformity with laws and regulations. The following are the principles of internal control:

Authorizing the responsibility

Segregation of duties

Documenting and recording transactions

Physical controls

Periodic independent verification

Human resource controls

Payroll: The total payment that a company is required to pay to its employee for the services received is called as payroll.

To Identify: Whether Restaurant B has internal controls to catch the payroll error.

To determine

To Identify: The way to detect the payroll error.

Expert Solution & Answer

Trending nowThis is a popular solution!

See solution

Check out sample textbook solution

Students have asked these similar questions

Payroll Internal Control Procedures Big Howie's Hot Dog Stand is a fast-food restaurant specializing in hot dogs and hamburgers. The store employs 8 full-time and 12 part-time workers. The store's weekly payroll averages $5,600 for all 20 workers. Big Howie’s uses a personal computer to assist in preparing paychecks. Each week, the store’s accountant collects employee time cards and enters the hours worked into the payroll program. The payroll program calculates each employee’s pay and prints a paycheck. The accountant uses a check-signing machine to sign the paychecks. Next, the restaurant’s owner/ manager authorizes the transfer of funds from the restaurant’s regular bank account to the payroll account. For the week of May 12, the accountant accidentally recorded 100 hours worked instead of 40 hours for one of the full-time employees. Does Big Howie's Hot Dog Stand have internal controls in place to catch this error? If so, how will this error be detected?

Question: wages and payroll the following system is used in a business regarding payment of the weekly wages to its 20 employees " the pay clerk prepares 20 correctly Labelled, sealed pay envelope and placed them next to the time book every Friday morning. When the employees come in the morning to sign the time book they pick their pay envelopes.' reqiured: please answer this question by: a) with reference to the above, identify one weakness of the system.

Big Howie’s Hot Dog Stand is a fast-food restaurant specializing in hot dogs and hamburgers. The store employs 8 full-time and 12 part-time workers. The store’s weekly payroll averages $5,600 for all 20 workers. Big Howie’s Hot Dog Stand uses a personal computer to assist in preparing paychecks. Each week, the store’s accountant collects employee time cards and enters the hours worked into the payroll program. The payroll program calculates each employee’s pay and prints a paycheck. The accountant uses a check-signing machine to sign the paychecks. Next, the restaurant’s owner authorizes the transfer of funds from the restaurant’s regular bank account to the payroll account.For the week of May 12, the accountant accidentally recorded 100 hours worked instead of 40 hours for one of the full-time employees.Does Big Howie’s Hot Dog Stand have internal controls in place to catch this error? If so, how will this error be detected?