Toni Burke is the manager of a group of coffee bars, Victoria's Better Butter Coffee Inc.

(VBBC). Toni has come to Avenue LLP, a public accounting firm, to discuss the

operations of VBBC. Specifically, she explains that VBBC just purchased a new

automated payroll system and as a result, payroll has increased significantly in the last

year. "We purchased this new system, as I am travelling between stores, and I found it

difficult to track all my employees manually." Toni has asked Avenue LLP to identify any

control weaknesses within the payroll process and provide recommendations to improve

them. Toni has provided a description of the payroll process:

"Our accounting department consists of four people: the owner of VBBC, myself and

two accountants reporting to me. The owner primary works in the background,

approving purchases and payments. When an employee joins VBBC, one of the

accountants enters their details in the employee database. Any changes, such as a new

bank account or pay raise, get entered in the same way. No one reviews the changes.

When an employee leaves VBBC, employee records remain active after employees are

terminated. I previously reviewed the list of employees active in the employee records

once per year because prior to this purchase, we did our timesheets and paycheques

by hand, so I knew who got paid every week."

"Each employee has a login, which they enter at the cash register when they start their

shift. They must log out when they end their shift. At the end of the day, the cash

register creates a timesheet for each employee and automatically sends the timesheets

to our payroll system, and every week, the system generates a final timesheet for the

week for the hours worked by each employee."

"These weekly timesheets then go directly to either of the accountants, who reviews and

adjusts the time if necessary. The timesheets are then sent to our new payroll provider

and the employees are paid."

Required:

a) Identify two control weaknesses in the payroll process, addressing the implication

each weakness has on VBBC. (4 marks)

b) Provide two recommendations to address each control weakness identified in

part a). (4 marks)