Overtime and Comments Working Paper

2905 Words Dec 27th, 2008 12 Pages
Part A
Internal Control Weakness Specific risk of fraud or error
Weakness of authorization procedures, According to case, Miss Knag call Simon Black to advise him on the relevant salary or wage to be paid to that employee. The risk is new employees would be higher than normal ones. In addition, it may give the leader a chance to add the employees who do not actually on work in order to cheat the money from company.
Weakness of authorization procedures According to case, company has appointed many new staff members but has not improved its payroll system to cope with the extra demands placed on it. The risk is there is not enough evidence for the new payroll system; it will be confused and made the mistakes.
Weakness of
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The risk is Mr. Blake should lost the timecards, or make mistake when entry the data during submission.
Weakness of Documentation procedures. According to case, Mr. Blake calculates and inputs the data, not one recalculate that. The risk is the figures might incorrect, so the result might be fraud.
Weakness of segregation of duties, According to case, Mr. Blake also calculates and inputs the employees’ gross pay, any deductions and net pay for the purposes of printing payroll cheques The risk is has the chance to conceal an error by falsifying the payroll cheques.
Weakness of documentation procedures. According to case, any processed time card does not be signed or marked as done. The risk is someone could copy record in the timecard, in order change that.
Weakness of independent internal verification. According to case, Mr. Blake sorts the time cards into the relevant department and then inputs data. The risk is patrol transaction file may include incorrectly keyed or invalid data.

Internal Control Weakness Specific risk of fraud or error
Weakness of segregation of duties. According to case, Mr. Blake had custody of cheques and the payroll system by himself. It the risk of misappropriate use any cheques payable to make a fraud or error account.
Weakness of segregation of function. According to case, the company has a cheque account with the local branch of bank. The

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