Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Expenditure Cycle Mountaineer Generators Payroll System Mountaineer Generators ( MG ) was founded in 1 9 9 5 in Morgantown, WV . The company specializes

Expenditure Cycle
Mountaineer GeneratorsPayroll System
Mountaineer Generators (MG) was founded in 1995 in Morgantown, WV. The company specializes in a range of gasoline powered electric generators for home backup, recreation, and commercial use. They have seen rapid growth over the past few years and currently employ 150 production, sales, and administrative employees. MGs current information system includes manual procedures supported by independent (non-networked) PCs in each department. Communication between departments is through hard-copy documents. You have been hired to assess Patriots procedures and internal controls. The following is a description of their payroll system.
Payroll System:
In the MG production departments, each worker records the number of hours he or she
has worked each day by clocking in and out on a timecard machine. The supervisor,
Boaty McBoatface, oversees this process and each week sends the hard copy
timecards to the payroll department. Using a stand-alone PC, the payroll department clerk enters timecard data and prepares hard-copy paychecks. This process automatically updates the digital employee payroll records. The clerk files the timecards in the payroll department and sends the employee paychecks to Boaty to review and distribute to the employees. The payroll clerk also prepares three copies of a payroll register. Copies one and two are sent to AP and the general ledger departments, respectively. The clerk files copy three in the payroll department. Upon receipt of the payroll register, the AP clerk manually prepares a check for the entire payroll, which she deposits in the payroll imprest account at the bank. A copy of the check is filed in the department, along with the payroll register. Using the payroll register and the department PC, the general ledger department clerk posts to the appropriate general ledger control accounts. The clerk then files the payroll register.
Required:
a. Prepare a DFD of the current payroll system.
b. Prepare system flowcharts for the payroll system.
c. Describe the uncontrolled risks associated with the system currently designed.
d. Describe the physical and IT controls needed to reduce the risks identified in C
above. Explain your solution.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting And Reporting

Authors: Mr Barry Elliott, Jamie Elliott

10th Edition

0273703641, 978-0273703648

Students also viewed these Accounting questions

Question

=+3. Who are the brand's competitors?

Answered: 1 week ago

Question

11.7 Discuss competency-based pay.

Answered: 1 week ago