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Pay Rolls and Internal Audit - Essay Example

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The report discusses the lack of internal controls in internal audit. The internal controls are regarding communications between the departments and between branches of the company. The two way obligations between various departments will solve many problems regarding the preparation of pay rolls and cover important aspects of internal audit.
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Pay Rolls and Internal Audit
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Download file to see previous pages No lapses were found in the management of pay roll or audit but the need to strengthen the control and improve the process of payment and audit in order to make process more and more accurate and transparent regarding the payment procedure were suggested. The need of strengthening of control of staff pay roll advances, and the need of obtaining additional and timely information from the HR department to ensure maintenance of better personal records was stressed. There was significant progress achieved through installation of computerized system for this purpose. The process of reviewing and procedures of documenting must take into consideration the gradual computerization of the process along with addressing the issues like leave on loss of pay and the adjustments made for that purpose. There is a need to make arrangements to produce salary statements according to the revised schemes in order to enable payroll department to distribute the sample for verification of major key salary elements on the personnel data bank.
The process of staff pay roll advances can be strengthened through analysis and regular follow up of accounts. The outstanding dues are liable to review and should be brought up to date. The HR department should discuss with Payroll Unit regarding providing a list of appointments, extension, cessations, leave for loss of pay for both regular and contract staff for ensuring a proper tallying of personnel records with pay roll records. If this type of communication is done manually or not done regularly, its effect on HR department will be costly. As the system was computerized it is now possible to obtain this information but there is a need of maintaining a database named personnel information system. Right now the work of personnel information department also was maintained by payroll unit only. This is making the system less efficient and even less accurate due to the non availability of up to date information.
Regarding the large number of alternate arrangements due to absence of staff, non appointment of regular staff, the lack of staff due to leaves on loss of pay; they involve an increment in cost to the company. Necessary steps were not taken to regularize the monitoring on these things and even to reduce the increment of pay due to these arrangements.
The review of payments processed by payment authorities is also important. This type of reviews result in strengthening control over travel expensed by reviewing travel claims and assurance that all travel is verified to feasible extent. The airline boarding passes, train tickets verification must be reviewed. The review can cover the travel expenses of permanent travelers, frequent travelers and the personnel traveling less often. The differences in the procedures must be studied and the verification process can be done with the knowledge of pay roll department to avoid complications as they will be in constant contact with the data base of all the staff. ( if the data base was provided. A recommendation for that type of data base was done earlier in the paper. No information of existing database was given in the information of the company)
The proposal of informing the instructions issued to managers of different departments who approve the payments to pay toll department can be mooted to make two obligations between payroll and internal audit more reasonable. This makes the pay roll ...Download file to see next pagesRead More
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