As part of the audit of Manor Company, you are assigned to review and test

(Control activities in payroll processing) As part of the auditof Manor Company, you areassigned to review and test the payroll transactions of the Galenaplant. Your tests showthat all numerical items were accurate. The proper hourly rateswere used, and the wagesand deductions were calculated correctly. The payroll register wasproperly footed, totaled,and posted.Various plant personnel were interviewed to ascertain the payrollprocedures beingused in the department. You determine that1. The payroll clerk receives the time cards from the variousdepartment supervisors at theend of each pay period, checks the employees hourly rate againstinformation providedby the personnel department, and records the regular and overtimehours for eachemployee.2. The payroll clerk sends the time cards to the plants dataprocessing department forcompilation and processing.3. The data processing department returns the time cards with theprinted checks and payrollregister to the payroll clerk on completion of the processing.4. The payroll clerk verifies the hourly rate and hours worked foreach employee by comparingthe detail in the payroll register to the time cards.5. If errors are found, the payroll clerk voids thecomputer-generated check, preparesanother check for the correct amount, and adjusts the payrollregister accordingly.6. The payroll clerk obtains the plant signature plate from theaccounting department andsigns the payroll checks.7. An employee of the personnel department picks up the checks andholds them untilthey are delivered to the department supervisors for distributionto the employees.Requireda. Identify the shortcomings in the payroll procedures used in thepayroll department ofthe Galena plant and suggest corrective actions.b. Identify the weaknesses, if any, that you believe are materialand the reasons why.ICMA (adapted)

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