The Darwin Department Store pays all of its employees on a salaried basis. Payroll processing is done internally. The payroll master file is maintained on disk. At periodic intervals every month, the HRM department uses online terminals to enter batches of payroll file-change transactions. After those changes pass the appropriate data entry controls, they are posted to the payroll master file. This run produces a printed report listing all file changes processed.

The payroll run takes place on the last day of each month. Because all employees are paid a fixed salary, there is no transaction input. This run produces printed employee paychecks, earnings registers, a printed summary report, and a payroll register file recorded on disk. The payroll register file is later processed to print a payroll register.

Required 1 What is meant by the term “payroll file-change transactions”? Give four exam¬ ples of these types of transactions.

2 Prepare a flowchart or DFD (whichever your instructor chooses) of the processes described.

3 Describe a comprehensive set of internal control procedures and policies for this payroll application. Relate each control procedure to a specific objective, and explain what threats it is designed to mitigate.