Using this supplemental information, analyze the flowchart in the diagram.The personnel department determines the wage rate of all employees. To start the process, personnel sends the payroll coordinator, George Jones, an authorization form in order to add an employee to the payroll. After Jones enters this information into the system, the computer automatically determines the overtime and shift differential rates for the individual, updating the payroll master files.Employees use a time clock to record the hours worked. Every Monday morning, George Jones collects the previous week’s time cards and begins the computerized processing of payroll information to produce paychecks the following Friday. Jones then reviews the time cards to ensure that the hours worked are correctly totaled; the system determines overtime and/or any shift differential.Jones performs all other processes displayed on the flowchart. The system automatically assigns a sequential number to each payroll check produced.The check stocks are stored in a box next to the computer printer to provide immediate access.After the checks are printed, an automatic check-signing machine signs them with an authorized signature plate that Jones keeps locked in a safe. After the check processing is completed, Jones distributes the checks to the employees, leaving the checks for the second- and third-shift employees with the appropriate shift supervisor. Jones then notifies the data processing department that he is finished with his weekly processing, and data processing makes a backup of the payroll master for storage in the computer room.RequiredIdentify and describe:a. Areas in the payroll processing system where the internal controls are inadequate.b. Two areas in the payroll system where the system controls are satisfactory. PAYROLL APPLICATION CONTROLPersonnelРroparesOriginalPayroll informationРоst PayrofInformationAuthorizationFormAuthorizationFormCalculate Overtimeand ShiftDifferential RatesPayrolMaster FileEmployeePunchesTimeClockEmployeesTime CardsDatabaseBackupReviewTime CardsforAccuracyPrepare EmployeePayrollNoReview WeeklyPayroll Registeron MonitorDoes PayrolRegister MatchTime Cards?VesProcess PayrollChecksPayrollRegisterPaychecksPrepare JournalEntryDistributetoЕmployeesGeneralLedger

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Answered: PAYROLL APPLICATION CONTROL Personnel…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Using this supplemental information, analyze the flowchart in the diagram.

The personnel department determines the wage rate of all employees. To start the process, personnel sends the payroll coordinator, George Jones, an authorization form in order to add an employee to the payroll. After Jones enters this information into the system, the computer automatically determines the overtime and shift differential rates for the individual, updating the payroll master files.
Employees use a time clock to record the hours worked. Every Monday morning, George Jones collects the previous week’s time cards and begins the computerized processing of payroll information to produce paychecks the following Friday. Jones then reviews the time cards to ensure that the hours worked are correctly totaled; the system determines overtime and/or any shift differential.
Jones performs all other processes displayed on the flowchart. The system automatically assigns a sequential number to each payroll check produced.
The check stocks are stored in a box next to the computer printer to provide immediate access.
After the checks are printed, an automatic check-signing machine signs them with an authorized signature plate that Jones keeps locked in a safe. After the check processing is completed, Jones distributes the checks to the employees, leaving the checks for the second- and third-shift employees with the appropriate shift supervisor. Jones then notifies the data processing department that he is finished with his weekly processing, and data processing makes a backup of the payroll master for storage in the computer room.
Required
Identify and describe:
a. Areas in the payroll processing system where the internal controls are inadequate.
b. Two areas in the payroll system where the system controls are satisfactory.

PAYROLL APPLICATION CONTROL
Personnel
Рropares
Original
Payroll information
Роst Payrof
Information
Authorization
Form
Authorization
Form
Calculate Overtime
and Shift
Differential Rates
Payrol
Master File
Employee
Punches
Time
Clock
Employees
Time Cards
Database
Backup
Review
Time Cards
for
Accuracy
Prepare Employee
Payroll
No
Review Weekly
Payroll Register
on Monitor
Does Payrol
Register Match
Time Cards?
Ves
Process Payroll
Checks
Payroll
Register
Paychecks
Prepare Journal
Entry
Distribute
to
Еmployees
General
Ledger

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