Based on the narrative given, identify SIX (6) weaknesses from the above payroll processes. For each identified weakness, recommend a change that can improve the internal control.

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Armando Agency is a modeling agency that represents fashion models, to work for the fashion industry. This agency earns their income via commission, usually from the deal they make with the model and/or the head agency. This agency employs 50 employees consisting models, photographers, trainers, and clerks in one big studio. The director, manager and account executive are place at the main office.

All employees record their attendance every morning using the punch card machine in the studio. At the end of the month, Mr. Alexander, the manager, gathers timecards from the studio clerk and sends them for payroll calculation to the account executive. Ms. Ramona, the account executive, examines the attendance information of the staff in the timecards against the employees’ master file. Ms. Ramona calculates the individual’s salary manually, including gross pay, commissions, and deductions. After that, she prepares individual’s payslip, payroll payment voucher and payroll registers for the month. These documents are used to prepare payroll disbursement.

There are two payroll disbursement methods: by cash or by cheque. Full-time models, for example, are paid by cheque, while part-time models are paid in cash. The account executive handles cash payments or paychecks in an individual envelope based on the payroll payment vouchers. The envelopes will be included along with the payslip, payroll payment voucher of the employees and she places them on the manager's desk. Then, the manager, Mr. Alexander signs the paychecks and forward them to the studio clerk for distribution to the employees.

(i)

Based on the narrative given, identify SIX (6) weaknesses from the above payroll processes. For each identified weakness, recommend a change that can improve the internal control.

Use the following format to answer the above questions:
Weakness:
Recommendation:
1.
2.
3.
4
5.
6.
Transcribed Image Text:Use the following format to answer the above questions: Weakness: Recommendation: 1. 2. 3. 4 5. 6.
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