net wage payable for their section. The payroll is preprinted, well designed and pages are numerically sequenced in a bound book. 10. Once the payrolls for the three sections have been prepared, they are sent to the factory accountant who reperforms the calculations on the payrolls, makes any corrections, and signs the payroll to acknowledge his control procedures. He then prepares and signs cheques for the net wages and all deductions to be paid over e.g. PAYE. The cheques are sent to the financial accountant for a second signature and the payrolls are returned to the respective administration clerks. The factory accountant also prepares a coinage schedule. 11. On receipt of the payrolls the administration clerks prepare a pre-printed paypacket for each employee in their section by writing the details of the employee and the period's wages onto the paypacket. 12. On the Friday morning a wage payout, Calpak (Pty) Ltd's security section takes the cheque and the coinage schedule to the bank. The cash is placed in three numbered bank bags (per instructions from Calpak (Pty) Ltd, sealed, and delivered to the administration clerks by security. The three administration clerks make up the paypackets for their section according to the payroll. 13. At 3pm on a payout Friday, the administration clerks (accompanied by a security guard) distribute the paypackets from the three pay points within the factory. Wage earners must present their staff identity card, sign the payroll next to their names on receiving their wages. As there are only approximately 40 wage earners per section, the payout is completed without significant delay. (Note: do not concern yourself with unclaimed wages). 14. During the course of the following week, the administration clerks update the employee ledger with details of each employee's wages and deductions. YOU ARE REQUIRED TO: a. Identify and explain the weaknesses in the payroll of Calpak (Pty) Ltd based on the information above. Your explanation must convey why you believe that the weaknesses you have identified are weaknesses. (30) b. For each weakness, explain in general terms if, and how, a computerized wage system would address the weakness. (10) QUESTION 2 (40 MARKS ) You are a newly appointed internal auditor at Calpak (Pty) Ltd. The company is a manufacturer of backpacks and bags for sporting equipment. The company employs approximately 120 hourly paid semi-skilled workers, equally spread over the three sections, cutting, stitching and finishing. Each section has a section supervisor who reports to the factory foreman. The wage payroll system is currently completely manual but management now wish to computerize the system. At the first phase of this exercise you have been asked to evaluate the system so that the company will have a better understanding of what weaknesses the computerized system must address. Your initial enquiries have revealed the following: 1. Wages are paid every two weeks. The wage period runs from a Thursday morning to a Wednesday afternoon, two weeks later. The work day commences at 7.30am and employees Page 11 of 23 work daily hour 2. On arrival at their section, employees report to their section supervisor who records presence by ticking the appropriate column on the daily time sheet. (See 7 below 3. Work periods are controlled by a factory siren (hooter). Employees commence work they hear the siren at 7.30am and end the days shift at 4.30pm, again when the ren som The siren is also used to control tea and lunch breaks 4. Workers are not required to sign themselves out at the end of the day, but they continue to work after 4.30pm, they must notify their section supervisor. On reporting for work the following day they must inform their section supervisor of the number of hours overtime they worked the previous afternoon/evening. The section supervisor records this on the daily time against employee's sheet 5. Three administration clerks from the accounting department are responsible for certain payroll functions. An administration clerk is located to each of the three sections . e. cutting, finishing stitching 6. Fach administration clerk maintains a ledger of all wage earners in the section for which he is responsible. The factory foreman is responsible for hiring and dismissing staff as well as receiving notices of resignation). When a change must be made to the employee ledger, the foreman sends a completed, pre-printed sequenced "Employee Engagement / Dismissal / Resignation Form to the section administration clerk. This contains full details of the employee, e date of engagement/dismissal, grade and pay scale. The clerk updates his ledger, and files the instruction from the foreman. 7. On Wednesday morning the administration clerks prepare the daily time sheets for their section for the following wage period. Daily time sheets are preprinted and sequenced (each section has its own unique sequence). The sheets consist of a column for each day of the working week in which the section supervisor can tick off each employee's (daily) attendance and enter any overtime worked. 8. Before 7am on Thursday morning, the administration Clerks take the daily time sheets (for the following wage period to the supervisor of the section for which they are responsible, and collect the completed wage period's time sheets. The supervisor and administration clerk sign the completed wage period's time sheets to acknowledge the transfer 9. The administration clerks then prepare the wage period (see point 1) payroll for their section. They calculate the normal hours worked (each "tick" represents 8 hours) and the overtime hours for each employee from the daily time sheets. The employees hourly pay rate is obtained from the employee ledger and overtime is calculated at the rate of one and a half times the normal wage. Using the relevant schedules and tables, the administration clerks calculate PAYE, UIF and medical aid deductions and calculate the Page 12 of 23 het wage payable for their section. The payroll is preprinted, well designed and page are numerically sequenced in a bound book. 10. Once the payrolls for the three sections have been prepared, they are sent to Factory accountant who reperforms the calculations on the payrolls, makes any corrections, and signs the payroll to acknowledge his control procedures. He then prepares and signs cheques for the net wapes and all deductions to be paid over el PAYE. The cheques are sent to the financial accountant for a second signature and the payrolls are returned to the respective administration derks. The factory accountant also prepares a coinage schedule. 11. On receipt of the payrolls the administration clerks prepare a pre-printed paypacket for each employee in their section by writing the details of the employee and the period's wages onto the paypacket. 12. On the Friday morning a wage payout, Calpak (Pty) Ltd's security section takes the cheque and the coinage schedule to the bank. The cash is placed in three numbered bank bags (per instructions from Calpak (Pty) Ltd, sealed, and delivered to the administration clerks by security. The three administration clerks make up the paypackets for their section according to the payroll. 13. At 3pm on a payout Friday, the administration Clerks (accompanied by a security guard) distribute the paypackets from the three pay points within the factory. Wage earners must present their staff identity card, sign the payroll next to their names on receiving their wages. As there are only approximately 40 wage earners per section, the payout is completed without significant delay. (Note: do not concern yourself with unclaimed wages). 14. During the course of the following week, the administration cerks update the employee ledger with details of each employee's wages and deductions. YOU ARE REQUIRED TO: a. Identify and explain the weaknesses in the payroll of Calpak (Pty) Ltd based on the information above. Your explanation must convey why you believe that the weaknesses you have identified are weaknesses. (30) b. For each weakness, explain in general terms if, and how, a computerized wage system would address the weakness. (10) net wage payable for their section. The payroll is preprinted, well designed and pages are numerically sequenced in a bound book. 10. Once the payrolls for the three sections have been prepared, they are sent to the factory accountant who reperforms the calculations on the payrolls, makes any corrections, and signs the payroll to acknowledge his control procedures. He then prepares and signs cheques for the net wages and all deductions to be paid over e.g. PAYE. The cheques are sent to the financial accountant for a second signature and the payrolls are returned to the respective administration clerks. The factory accountant also prepares a coinage schedule. 11. On receipt of the payrolls the administration clerks prepare a pre-printed paypacket for each employee in their section by writing the details of the employee and the period's wages onto the paypacket. 12. On the Friday morning a wage payout, Calpak (Pty) Ltd's security section takes the cheque and the coinage schedule to the bank. The cash is placed in three numbered bank bags (per instructions from Calpak (Pty) Ltd, sealed, and delivered to the administration clerks by security. The three administration clerks make up the paypackets for their section according to the payroll. 13. At 3pm on a payout Friday, the administration clerks (accompanied by a security guard) distribute the paypackets from the three pay points within the factory. Wage earners must present their staff identity card, sign the payroll next to their names on receiving their wages. As there are only approximately 40 wage earners per section, the payout is completed without significant delay. (Note: do not concern yourself with unclaimed wages). 14. During the course of the following week, the administration clerks update the employee ledger with details of each employee's wages and deductions. YOU ARE REQUIRED TO: a. Identify and explain the weaknesses in the payroll of Calpak (Pty) Ltd based on the information above. Your explanation must convey why you believe that the weaknesses you have identified are weaknesses. (30) b. For each weakness, explain in general terms if, and how, a computerized wage system would address the weakness. (10) QUESTION 2 (40 MARKS ) You are a newly appointed internal auditor at Calpak (Pty) Ltd. The company is a manufacturer of backpacks and bags for sporting equipment. The company employs approximately 120 hourly paid semi-skilled workers, equally spread over the three sections, cutting, stitching and finishing. Each section has a section supervisor who reports to the factory foreman. The wage payroll system is currently completely manual but management now wish to computerize the system. At the first phase of this exercise you have been asked to evaluate the system so that the company will have a better understanding of what weaknesses the computerized system must address. Your initial enquiries have revealed the following: 1. Wages are paid every two weeks. The wage period runs from a Thursday morning to a Wednesday afternoon, two weeks later. The work day commences at 7.30am and employees Page 11 of 23 work daily hour 2. On arrival at their section, employees report to their section supervisor who records presence by ticking the appropriate column on the daily time sheet. (See 7 below 3. Work periods are controlled by a factory siren (hooter). Employees commence work they hear the siren at 7.30am and end the days shift at 4.30pm, again when the ren som The siren is also used to control tea and lunch breaks 4. Workers are not required to sign themselves out at the end of the day, but they continue to work after 4.30pm, they must notify their section supervisor. On reporting for work the following day they must inform their section supervisor of the number of hours overtime they worked the previous afternoon/evening. The section supervisor records this on the daily time against employee's sheet 5. Three administration clerks from the accounting department are responsible for certain payroll functions. An administration clerk is located to each of the three sections . e. cutting, finishing stitching 6. Fach administration clerk maintains a ledger of all wage earners in the section for which he is responsible. The factory foreman is responsible for hiring and dismissing staff as well as receiving notices of resignation). When a change must be made to the employee ledger, the foreman sends a completed, pre-printed sequenced "Employee Engagement / Dismissal / Resignation Form to the section administration clerk. This contains full details of the employee, e date of engagement/dismissal, grade and pay scale. The clerk updates his ledger, and files the instruction from the foreman. 7. On Wednesday morning the administration clerks prepare the daily time sheets for their section for the following wage period. Daily time sheets are preprinted and sequenced (each section has its own unique sequence). The sheets consist of a column for each day of the working week in which the section supervisor can tick off each employee's (daily) attendance and enter any overtime worked. 8. Before 7am on Thursday morning, the administration Clerks take the daily time sheets (for the following wage period to the supervisor of the section for which they are responsible, and collect the completed wage period's time sheets. The supervisor and administration clerk sign the completed wage period's time sheets to acknowledge the transfer 9. The administration clerks then prepare the wage period (see point 1) payroll for their section. They calculate the normal hours worked (each "tick" represents 8 hours) and the overtime hours for each employee from the daily time sheets. The employees hourly pay rate is obtained from the employee ledger and overtime is calculated at the rate of one and a half times the normal wage. Using the relevant schedules and tables, the administration clerks calculate PAYE, UIF and medical aid deductions and calculate the Page 12 of 23 het wage payable for their section. The payroll is preprinted, well designed and page are numerically sequenced in a bound book. 10. Once the payrolls for the three sections have been prepared, they are sent to Factory accountant who reperforms the calculations on the payrolls, makes any corrections, and signs the payroll to acknowledge his control procedures. He then prepares and signs cheques for the net wapes and all deductions to be paid over el PAYE. The cheques are sent to the financial accountant for a second signature and the payrolls are returned to the respective administration derks. The factory accountant also prepares a coinage schedule. 11. On receipt of the payrolls the administration clerks prepare a pre-printed paypacket for each employee in their section by writing the details of the employee and the period's wages onto the paypacket. 12. On the Friday morning a wage payout, Calpak (Pty) Ltd's security section takes the cheque and the coinage schedule to the bank. The cash is placed in three numbered bank bags (per instructions from Calpak (Pty) Ltd, sealed, and delivered to the administration clerks by security. The three administration clerks make up the paypackets for their section according to the payroll. 13. At 3pm on a payout Friday, the administration Clerks (accompanied by a security guard) distribute the paypackets from the three pay points within the factory. Wage earners must present their staff identity card, sign the payroll next to their names on receiving their wages. As there are only approximately 40 wage earners per section, the payout is completed without significant delay. (Note: do not concern yourself with unclaimed wages). 14. During the course of the following week, the administration cerks update the employee ledger with details of each employee's wages and deductions. YOU ARE REQUIRED TO: a. Identify and explain the weaknesses in the payroll of Calpak (Pty) Ltd based on the information above. Your explanation must convey why you believe that the weaknesses you have identified are weaknesses. (30) b. For each weakness, explain in general terms if, and how, a computerized wage system would address the weakness