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The payroll cycle - Coggle Diagram
The payroll cycle
Functions
Time keeping function
Payroll preparation
Human resources function
payment preparation and pay-out
deductions: payments and recording
Control objectives
Completeness
Recording
Vadility
Authorisation
Cut off
internal controls
Completeness:
All valid payroll transactions are recorded and nothing is left out.
Recording:
All purchase transactions are correctly recorded.
Validity and Authorisation:
All recorded wages are valid and supported by proper documentation.
Cut off:
All payroll transactions are recorded in the correct reporting period.
Accuracy:
Payroll transaction are shown at the correct amounts.
Test of conttrol
Observe whether each employee collects their own payment and signs for it.
Inspect the payroll for signature of the senior official evidencing for proof of review and approval.
Follow any deviations with management
weakness
No segregation of duties
The senior does not review the payroll
Employees do not follow the company's policy
Documents used
Payroll amendment forms
Updated list of employee details
Employee’s file
Substantive procedures
compare prior years to current
Check if the time recorded matches with the one on the job card