Accounting Information Systems
10th Edition
ISBN: 9781337619202
Author: Hall, James A.
Publisher: Cengage Learning,
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Question
Chapter 6, Problem 2P
a.
To determine
Explain the risk associated with payroll procedure.
b.
To determine
Explain the control techniques to eliminate the risk associated with payroll procedure.
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Refer to the flowchart.a. What risks are associated with the payroll procedures depicted in the flowchart?b. Discuss two control techniques that will reduce or eliminate the risks.
PAYROLL FLOWCHART ANALYSIS
Discuss the risks depicted by the payroll system flowchart for this problem.Describe the internal control improvements to the system that areneeded to reduce these risks.
What is the purpose of the following control procedures (i.e., what threats is it designed to mitigate)?
e. Cross-footing the payroll register
Chapter 6 Solutions
Accounting Information Systems
Ch. 6 - Which document is used by the cost accounting...Ch. 6 - Prob. 2RQCh. 6 - Prob. 3RQCh. 6 - Why should employee paychecks be drawn against a...Ch. 6 - Prob. 5RQCh. 6 - Prob. 6RQCh. 6 - Prob. 7RQCh. 6 - Prob. 8RQCh. 6 - Prob. 9RQCh. 6 - Prob. 10RQ
Ch. 6 - What are the objectives of a fixed asset system?Ch. 6 - How do fixed asset systems differ from purchases...Ch. 6 - What are three tasks of the fixed asset system?Ch. 6 - What information is found on the depreciation...Ch. 6 - Why is it crucial to the integrity of the...Ch. 6 - Prob. 16RQCh. 6 - Prob. 17RQCh. 6 - What document shows when fixed assets are fully...Ch. 6 - Who should authorize disposal of fixed assets?Ch. 6 - Assets used for production are secured in a...Ch. 6 - What is the importance of the job ticket?...Ch. 6 - Prob. 2DQCh. 6 - Prob. 3DQCh. 6 - Prob. 4DQCh. 6 - Discuss some specific examples in which...Ch. 6 - Discuss some service industries that may require...Ch. 6 - Prob. 7DQCh. 6 - If an asset that is not fully depreciated is sold...Ch. 6 - Discuss the fundamental risk and control issues...Ch. 6 - Prob. 10DQCh. 6 - Prob. 11DQCh. 6 - Describe an internal control that would prevent...Ch. 6 - Prob. 13DQCh. 6 - What negative consequences result when fixed asset...Ch. 6 - Prob. 1MCQCh. 6 - Prob. 2MCQCh. 6 - Prob. 3MCQCh. 6 - Prob. 4MCQCh. 6 - Which one of the following documents captures the...Ch. 6 - Which of the following are not fixed asset system...Ch. 6 - All of the following controls are likely to apply...Ch. 6 - All of the following data items are likely to be...Ch. 6 - The following are all transactions processed in...Ch. 6 - Prob. 10MCQCh. 6 - PAYROLL FRAUD John Smith worked in the stockyard...Ch. 6 - Prob. 2PCh. 6 - Prob. 3PCh. 6 - Prob. 4PCh. 6 - Prob. 5PCh. 6 - Prob. 6PCh. 6 - Prob. 7PCh. 6 - Prob. 8PCh. 6 - FIXED ASSET SYSTEM-FRAUD POTENTIAL Holder Co....Ch. 6 - Prob. 10PCh. 6 - Prob. 11PCh. 6 - Prob. 12PCh. 6 - Prob. 1ICCCh. 6 - Prob. 2ICCCh. 6 - Prob. 3ICCCh. 6 - Prob. 4ICCCh. 6 - Prob. 5ICCCh. 6 - Prob. 6ICC
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Similar questions
- Discuss the risks depicted by the payroll system flowchart. Describe the internal control improvements to the system that are needed to reduce these risks.arrow_forwardDescribe a walkthrough of the payroll transaction flow from hiring authorization to payroll checkdisbursement. (a) What document copies would be collected? (b) What controls should be noted?arrow_forwardQuestion: Why payroll internal controls are important? briefly explain.arrow_forward
- what are the examples of independent verification controls in a payroll accounting systemarrow_forwardbelow presents the payroll procedures of XYZ Limited. We discussed various aspects of such payroll procedures. In the light of that discussion, identify the potential frauds possible in the payroll system of XYZLimited. Also, discuss the control techniques to avoid these fraudsarrow_forwardThe following are typical questions that might appear on an internal control questionnaire for payroll activities: 1. Is there adequate separation of duties between employees who maintain human resources records and employees who approve payroll disbursements? 2. Is there adequate separation of duties between personnel who maintain timekeeping or attendance records for employees and employees who distribute payroll checks? Describe the purpose of each of the above controlsarrow_forward
- Figure below presents the payroll procedures of AAA Limited. We discussed various aspects of such payroll procedures. In the light of that discussion, identify the potential frauds possible in the payroll system of AAA Limited. Also, discuss the control techniques to avoid these frauds. [arrow_forwardPls further explain the diagram above and identify types of errors that may cause a payroll record to be placed in the error file.arrow_forwardWhich internal control is not an important part of the payroll system? a. supervisors verify the accuracy of employee time cards b. paychecks are distributed by an independent paymaster c. the accounts payable department verifies the accuracy of the payroll register before transfer-ring payroll funds to the general checking account d. the general ledger department reconciles the labor distribution summary and the payroll disbursement voucherarrow_forward
- The following are typical questions that might appear on an internal control questionnaire for payroll activities: 1. Is there adequate separation of duties between employees who maintain human resources records and employees who approve payroll disbursements? 2. Is there adequate separation of duties between personnel who maintain timekeeping or attendance records for employees and employees who distribute payroll checks? Describe the manner in which each of the above controls might be tested.arrow_forwardFor the purpose of internal control, the same person who prepares payroll checks should also distribute them. True or False True Falsearrow_forwardMatch the four functions of payroll activities with their related internal controls: a. An independent employee should sign and distribute the prenumbered checks. select a function Hiring EmployeesPaying the PayrollPreparing the PayrollTimekeeping b. Supervisors should monitor hours worked through time reports. select a function Hiring EmployeesPaying the PayrollPreparing the PayrollTimekeeping c. Human Resources department should authorize employment. select a function Hiring EmployeesPaying the PayrollPreparing the PayrollTimekeeping d. Two or more employees should verify payroll amounts. select a functionarrow_forward
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