Question 220 marks a Identify any FOUR 4 control weaknesses

Question 2(20 marks) (a) Identify any FOUR (4) control weaknesses in Zeta\'s payroll process. (b) For each of the control weaknesses that you have identified in (a), suggest (8 marks) ONE (1) necessary control to address that weakness. (12 marks)

Solution

The following are the four control weakness in Zeta\'s payroll process :

1.Lack of Proper Communiction : Communications vertically or Risk horizontally within the payroll function and the organisation are ineffective and result in messages that are inconsistent with authorised responsibilities or established measures.
The possible consequences are that the senior management are not aware of payroll problems which can delay action.

2.Lack of Proper Skills and competance to handle the Payroll software : The personnel responsible for managing and controlling the process do not possess requisite knowledge and skills or eeprerinece to ensure that critical business objectives are achieved.
The Possible consequence of this can be under or over payments to staff of the organisation.It may also result in cauing of errors.

3.Inefficiency : The resources used to produce the outputs are not minimised or the output produced are not at optimum level .
This has resulted in an increase of payroll adminstration costs.

4.Lack of Proper authentication and Authority : Do to lack of control over authorisation the following can be faced by the organisaation :

(b) Necessary Control to address the Weakness mentioned above:

IMPROPER COMMUNICATION	This can be tackled by establishing a robust communication system in the entire organisation.A friendly and informal meetings, desk groups,Open Work spaces etc can bridge the communication gaps beween employees.
LACK OF PROPER SKILLS AND COMPETENCE	Payroll staff should have ongoing training in legislative and management policy requirements. Succession planning should be established for payroll staff functions and responsibilities Arrangements should be in place so that access to HR experts can be readily obtained. Rotation of staff in the payroll processing area for improved control and cross-skilling.
INEFFICIENCY	Cost-benefit of payroll function to be reviewed periodically Feedback on the quality of payroll reports to be sought from clients periodically Benchmarking of the payroll function on a periodic basis
LACK OF PROPER AUTHORISATION	Ensure that the same person isn’t authorized to write and sign a check Use a system of checks and balances to ensure no one person has control over all parts of a financial transaction Require supervisors to approve employees’ time sheets before payroll is prepared.