The Payroll Accounting Cycle or Payroll Cycle is fundamentally a procedure for entering clip and attending and change overing that informations into paysheet computations and paysheet expenses ( Robertson. 2003 ) . This rhythm covers all activities related to payroll from engaging and firing to pay distribution.
The paysheet rhythm has four basic phases ; enlisting. which covers the designation of vacant places. advertisement for the vacancies. and choice of a campaigner for hire. clip and attending. which is a record of all the work hours of the employees. salary distribution. which involves the depositing of payroll checks into the employees account. and unfunded liability. which determines the unfunded one-year leave and separation wage ( Payroll Cycle. 2005 ) .
The most of import internal control procedure in the Payroll Accounting Cycle is the division of responsibilities ( Bierstaker. 1997 ) . Under this control procedure. the chief undertakings should be handled by different people. This means that processes such as the hiring and fire of forces and the direction of labour dealingss. the supervising blessing of work clip. the readying and timekeeping of paysheet. the paysheet cheque readying and related paysheet studies every bit good as the paysheet distribution and existent detention of cheques and its subsequent distribution to employees. should all be handled by five separate hearers to guarantee the unity and truth of the Payroll Cycle ( Robertson. 2003 ) .
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Another specific internal control in the Payroll Cycle is by implementing mandate demands. This fundamentally acts as a cheques and balance characteristic in the Payroll Accounting Cycle ( Bierstaker. 1997 ) . In this control procedure. the wage base informations. which is the information on which wage is based including factors such as hours. piece rate volume. and inducements. and forces engaging and firing determinations. should all be ab initio approved by a supervisor or an independent section ( Robertson. 2003 ) .
Supplying that all these controls are implemented decently. there should be no comparative failings in the Payroll Cycle. There are chances nevertheless that the internal control systems will neglect to observe material misstatements. The methods that can be used to place the strengths and failings in the Payroll Accounting Cycle of a concern involve careful scrutinizing. hazard appraisal and control hazard appraisal ( Bierstaker. 1997 ) .
In carry oning control hazard appraisals it should ever be remembered that if the control hazard is assessed really low. substantial audit processs can be limited in cost-saving ways. If it is assessed really high. substantial processs will necessitate to be designed to take down the hazard of neglecting to observe material misstatement in the history balances ( Robertson. 2003 ) . There is no perfect Payroll Accounting Cycle and command steps should ever be implemented and audited sporadically.
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