Beruflich Dokumente
Kultur Dokumente
HAPTER 13
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INTRODUCTION
Questions to be addressed in this chapter
include:
What are the basic business activities and
data processing operations that are performed
in the human resources management
(HRM)/payroll cycle?
What decisions need to be made in this cycle,
and what information is needed to make these
decisions?
What are the major threats and the controls
that can mitigate those threats?
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INTRODUCTION
The HRM/payroll cycle is a recurring set of
business activities and related data
processing operations associated with
effectively managing the employee
workforce.
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INTRODUCTION
The more important tasks performed in the
HRM/payroll cycle are:
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INTRODUCTION
The most important tasks performed in the
HRM/payroll cycle are:
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INTRODUCTION
The most important tasks performed in the
HRM/payroll cycle are:
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INTRODUCTION
The most important tasks performed in the
HRM/payroll cycle are:
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INTRODUCTION
The most important tasks performed in the
HRM/payroll cycle are:
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INTRODUCTION
The most important tasks performed in the
HRM/payroll cycle are:
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INTRODUCTION
In this chapter, well focus primarily on the
payroll system:
Accountants are traditionally responsible for
its function.
Must be designed to meet:
Managements needs.
Government regulations.
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INTRODUCTION
The design of the HRM system is also
important because the knowledge and
skills of employees are valuable assets, so
HRM systems should:
Help assign these assets to appropriate tasks;
and
Help monitor their continuous development.
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INTRODUCTION
There are five major sources of input to the
payroll system:
HRM department provides information about
hiring, terminations, and pay-rate changes.
Employees provide changes in discretionary
deductions (e.g., optional life insurance).
Various departments provide data about the
actual hours worked by employees.
Government agencies provide tax rates and
regulatory instructions.
Insurance companies and other organizations
provide instructions for calculating and remitting
various withholdings.
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INTRODUCTION
Principal outputs of the payroll system are
checks:
Employees receive individual paychecks.
A payroll check is sent to the bank to transfer funds
from the companys regular account to its payroll
account.
Checks are issued to government agencies,
insurance companies, etc., to remit employee and
employer taxes, insurance premiums, union dues,
etc.
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INTRODUCTION
Organizational success depends on skilled and
motivated employees:
Their knowledge and skills affect quality and quantity
of goods and services.
Labor costs are a major expense in generating
revenues and a key cost driver.
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INTRODUCTION
In the 1990s companies began creating
positions for a director of intellectual assets
with responsibilities for developing and
managing intellectual assets.
Some may even include HR info in their
annual report, including reports on:
Human capital: The knowledge employees
possess, which can be enhanced.
Intellectual capital: The knowledge thats been
captured and implemented in decision support
systems, expert systems, or knowledge
databases, so that it can be shared.
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INTRODUCTION
Because employees are so valuable,
turnover is expensive:
Average cost of replacement is 1.5 times
the employees annual salary.
Turnover rates need to be managed so
theyre not excessive.
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INTRODUCTION
Employee morale is also important
Bad morale leads to high turnover.
Employee attitudes affect customer interactions
and are positively correlated with profitability.
Employees need to:
Believe they have the opportunity to do what they do
best.
Believe their opinions count.
Believe their coworkers are committed to quality.
Understand the connection between their jobs and the
companys mission.
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INTRODUCTION
To effectively track intellectual capital
and human resources, the AIS must do
more than just record time and
attendance and prepare paychecks.
Payroll should be integrated with HRM
so management can access data about
employee-related costs and employee
skills and knowledge.
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Badge readers
Electronic time clocks
Data entered on terminals
Touch-tone telephone logs
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PREPARE PAYROLL
The employees department provides
data about hours worked.
A supervisor confirms the data.
Pay rate information is obtained from
the payroll master file.
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PREPARE PAYROLL
Procedures:
The payroll transaction file is sorted by
employee number (same sequence as master
file).
For each transaction, the payroll master file is
read for pay rates, etc., and gross pay is
calculated.
Hourly employees: Gross pay = (hours worked x
wage rate) + Overtime + Bonuses
Salaried employees: Gross pay = Annual salary x
Fraction of year worked
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PREPARE PAYROLL
Payroll deductions are summed and
subtracted from gross pay to obtain net
pay. There are two types of deductions:
Payroll tax withholdings
Voluntary deductions
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PREPARE PAYROLL
The following are printed:
Paychecks for employeesoften accompanied
by an earnings statement, which lists pay detail,
current and year-to-date.
A payroll register, which lists each employees
gross pay, deductions, and net pay in a multicolumn format:
Is used to authorize the transfer of funds to the
companys payroll bank account.
May be accompanied by a deduction register,
listing miscellaneous voluntary deductions for each
employee.
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PREPARE PAYROLL
As payroll transactions are processed,
labor costs are accumulated by general
ledger accounts based on codes on the job
time tickets.
The totals for each account are used as the
basis for a summary journal entry to be posted
to the general ledger.
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DISBURSE PAYROLL
Most employees are paid either by:
Check
Direct deposit
In some industries, such as
construction, cash payments may still
be made, but does not provide good
documentation
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DISBURSE PAYROLL
Procedures:
When paychecks have been prepared, the
payroll register is sent to accounts payable for
review and approval.
A disbursement voucher is prepared to
authorize transfer of funds from checking to
the payroll bank account.
For control purposes, checks should not be drawn on the
companys regular bank account
A separate account is created for this purpose.
Limits the companys loss exposure.
Makes it easier to reconcile payroll and detect paycheck
forgeries.
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DISBURSE PAYROLL
The approved disbursement voucher and payroll
register are sent to the cashier. The cashier:
Reviews the documents.
Prepares and signs the payroll check to transfer the
funds.
Reviews, signs, and distributes employee
paychecks (which separates authorization and
recording from distribution of checks).
Re-deposits unclaimed checks in the companys
bank account.
Sends a list of these paychecks to internal audit for
investigation.
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DISBURSE PAYROLL
Returns the payroll register to payroll department,
where it is filed with time cards and job time tickets.
Sends the disbursement voucher to accounting
clerk to update general ledger.
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DISBURSE PAYROLL
Efficiency opportunity: Direct deposit
Direct deposit can improve efficiency and
reduce costs of payroll processing.
Employee receives a copy of the check and an
earnings statement.
Each bank receives a record of the payroll deposits for
that bank via EDI. The record includes:
Employee number
Social security number
Bank account number
Net pay amount
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DISBURSE PAYROLL
Savings occur because:
While the cashier does authorize release of
funds, he/she does not sign each check.
Eliminates costs of buying, processing, and
distributing paper checks.
Eliminates postage.
Additional costs:
Elimination of float between when check is
distributed and when it is deposited by
employee.
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OUTSOURCING OPTIONS
Many entities outsource payroll and HRM
to:
Payroll service bureaus
Maintain the payroll master file and perform payroll
processing activities.
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OUTSOURCING OPTIONS
When organizations outsource payroll
processing, they send the service bureau
or PEO at the end of each period:
Personnel changes.
Employee time and attendance data.
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OUTSOURCING OPTIONS
Outsourcing is especially attractive to small and
mid-size businesses because:
Its often cheaper for smaller companies.
The bureau or PEO may provide a wider range of
benefits.
It frees up the companys computer resources for
other areas.
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THREATS IN EMPLOYMENT
PRACTICES
Objective:
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THREATS IN PAYROLL
PROCESSING
Objective:
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GENERAL
THREATS
The types of problems posed by each threat.
The controls that can mitigate the threats.
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SUMMARY
Youve learned about the basic business
activities and data processing operations that
are performed in the HRM/payroll cycle,
including recruiting, hiring, training, assigning,
compensating, evaluating, and discharging
employees.
Youve also learned about key procedures in
payroll processing.
Youve learned how IT can improve the
efficiency and effectiveness of these processes.
2008 Prentice Hall Business Publishing
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SUMMARY
Youve learned about decisions that need
to be made in the HRM/payroll cycle and
what information is required to make these
decisions.
Youve also learned about the major
threats that present themselves in the
HRM/payroll cycle and the controls that
can be instigated to mitigate those threats.
2008 Prentice Hall Business Publishing
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