Following is a list of five control plans from this chapter (or from earlier chapters and tailored to the HR management and payroll processes of this chapter):
Control Plans
A. Specific approval of HR/payroll changes
B. One-for-one checking of hours per attendance time data and hours shown on pay stubs
C. Imprest payroll bank account
D. Hash totals of employee ID numbers
E. Electronic time management system
Required
Listed next are four process failures that have control implications. Write the numbers 1 through 4 on your solution sheet. Next to each number, insert one letter from the preceding list indicating the control plan that would best prevent the process failure from occurring. Also, give a brief, one- to two-sentence explanation of your choice. A letter should be used only once, with one letter left over.
Process Failures
1. An employee in the HR department prepared a bogus change of pay form to increase his salary by $25 per week. The form was submitted for processing and was entered into the system without being challenged.
2. Attendance time data is often not entered, not entered in a timely manner, or not accurate.
3. Each weekly pay period, a check is drawn on the general cash account and deposited to the payroll bank account in an amount “estimated” to be sufficient to cover the actual total of payroll checks issued that week. As a result, the payroll account runs a balance of several thousand dollars (non–interest-bearing), a situation that the newly hired treasurer has questioned.
4. In entering attendance time data, the data entry clerk misread all 7s as 9s. Although some time data were rejected, other data were processed against wrong employees, who happened to have a 9 instead of a 7 in the comparable position in their employee ID number.
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