Internal Control Procedures in Payroll?

Question : Internal Control Procedures in Payroll?

Answer : Internal control procedures, the practices and guidelines a business follows to protect its resources, are especially important when recording, preparing and distributing the payroll. Having proper procedures in place protects the company’s assets by reducing the risk of fraud and eliminating errors. According to the Risk Unit of Marquette University, inadequate segregation of duties is the university’s most common audit finding. This improper separation of duties involving payroll tasks leads to a higher risk of loss through fraud and negligence.Four categories of tasks involved in payroll — hiring and advancing personnel, recording and maintaining accurate time sheets, preparing payroll and paying employees and payroll taxes.

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