Sia - ch13 - HRM & Payroll Cycle

HRM & Payroll Cycle
Main topic:
AKTIVITAS UTAMA
CONTROL, OBJECTIVES, THREAT, PROCEDURES
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PayroLL CycLe: give cash get Labor
Terdiri dari:
PEREKRUTAN
TRAINING
PENUGASAN
PENGGAJIAN
EVALUASI KINERJA
PEMBERHENTIAN
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Keterkaitan PayroLL CycLe dengan Sistem/Bagian

Lain
CycLe
Interaction
HRM department
Recruitment, discharge, pay-rate
Employees
Add and Deductions
Production CycLe
actual hours worked
Government agencies
Tax rates, minimum pay-rate
Insurance, Bank, etc
Add and Deductions
Accountant
Financial & tax, measurement, disclosure,

compliance
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Aktivitas Utama PayroLL CycLe
Update payroll master file
Update tax rates and deductions
Validate time and attendance data
Prepare payroll
Calculate employer-paid benefits and taxes
Disburse payroll
Disburse payroll taxes and miscellaneous deductions
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Deskripsi Aktivitas Utama PayroLL CycLe

No
Activities
Description
Update payroll master file
new hires, terminations, changes in pay rates, etc

Validity check jumlah pegawai
Update tax rates and

deductions
Periodically
From government
Validate time and

attendance data
Hourly basis & fixed salary

Time card/time ticket
Commision & Design Bonus
Media yang digunakan: Badge readers, time card,
finger print, etc
Prepare payroll
Batch Processing
Paychecks & PayroLL Register
Calculate employer-paid
benefits and taxes
Medical insurance, Retirement contribution,

donation, etc
Disburse payroll
Metode Pembayaran: Cash, Check & Direct Deposit
Disburse payroll taxes and

miscellaneous deductions
To other institutions
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Penentuan Bonus/ Komisi yang baik
Dapat Diukur
Sejalan dengan tujuan perusahaan
Termonitor
LegaL
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Direct Deposit
KeLebihan:
EFFICIENCY OPPORTUNITY
Needs: Account number & net pay amount (payroll

register)
SAVING OCCUR
Eliminate cost (paper) and distribution

TIMELY
Eliminate floating time
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Outsourcing Options
PSB
Payroll Service Bureaus

Maintain the payroll master file and perform
payroll processing activities.
PEO
Professional Employer Organizations

Idem PSB
++ Also administer and design employee
benefit plans.
More expensive than PSB
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ControL, Objectives, Threat & Procedure
OBJECTIVES
All transactions are properly authorized.

All recorded transactions are valid.
All valid and authorized transactions are recorded.
All transactions are recorded accurately (amount, account,
time)
Assets are safeguarded from loss or theft.
Business activities are performed efficiently and effectively.
The company is in compliance with all applicable laws and
regulations.
All disclosures are full and fair.
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Threats in EmpLoyment Practices
THREAT 1: Hiring Unqualified Employees
Why is this a problem?
Can increase production expenses.

Can result in theft of assets.
Can result in civil and criminal penalties for the company
Controls:
State skill qualifications for each position explicitly in the position control
report.
Ask candidates to sign a statement confirming the accuracy of the
information on their application.
Conduct the background checks and verify skills and references, including
college degrees earned:
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Threats in EmpLoyment Practices
THREAT 2: Violation of employment law
Can result in stiff government penalties as well as civil suits.
Controls:
Carefully document all actions relating to advertising, recruiting, hiring new

employees, and dismissal of employees, to demonstrate compliance.
Provide employees with continual training to keep them current with
employment law.
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Threats in PayroLL Processing
THREAT 3: Unauthorized changes to the payroll

master file
Can increase expenses if wages, salaries, commissions, or base rates are

falsified.
Can result in inaccurate reporting and erroneous decisions.
Controls:
Proper segregation of duties

Only HRM department should be able to update payroll master file.
HRM employees should not directly participate in payroll processing or
distribution.
Prevents the creation of ghost employees and fraudulent checks.
Restrict logical and physical access to the payroll system:
Utilize user IDs, passwords, and an access control matrix.
Control terminals from which payroll data and programs can be
accessed.
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THREAT 4: Inaccurate time data
Can result in payments for services not rendered.

Inaccurate or missing checks can damage employee morale.
Can result in inaccurate labor reporting.
Controls:
Automation can reduce unintentional inaccuracies

Data entry programs should include edit checks:
Field checks for employee number and hours worked
Limit checks on hours worked
Validity checks on employee numbers
Segregation of duties can reduce intentional inaccuracies
People who process payroll should not have access to payroll master
file.
Supervisors should approve all changes.
Time clock data should be reconciled to job time tickets by an
independent party.
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THREAT 5: Inaccurate processing of payroll
Errors damage employee morale, especially if they cause late paychecks.

Penalties can accrue if:
Proper payroll taxes are not remitted to the government.
Court-ordered paycheck garnishments are not made appropriately.
Controls:
Batch Total & Cross Footing

Payroll clearing account (zero balance)
Review decisions to hire temporary or outside help to make sure workers are
properly classified as employees or independent contractors.
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THREAT 6: Theft or fraudulent distribution of

paychecks
Payments may be made to fictitious (ghost) or terminated employees,

resulting in Increased expenses & Lost of cash
Controls:
Restrict access to blank payroll checks and check signing machine.

All checks should be sequentially pre-numbered and accounted for
periodically.
Cashier should sign all checks, but only when supported by proper
documentation.
Someone independent of the payroll process should reconcile the payroll
bank account.
Segregate duties between those who authorize and record payroll and those
who distribute checks and transfer funds.
Have internal audit observe payroll distribution on a surprise basis.
Unclaimed checks should be returned to the treasurers office for prompt redeposit and should be investigated.
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GeneraL Control Issues
The related general threats are:

THREAT 7:
Loss, alteration, or unauthorized

disclosure of data
THREAT 8: Poor performance
THREAT NO. 8Poor performance
May damage employee relations

Reduces profitability
Controls:
Prepare and review performance reports
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THREAT NO. 7Loss, alteration, or unauthorized

disclosure of data
Loss or alteration of payroll data can result in delayed and/or inaccurate

paychecks and reports.
Unauthorized disclosure of confidential employee data can violate state and
federal laws and damage employee morale.
Controls:
back up regularly.
file labels to reduce chance of accidentally erasing important data.
Access controls utilized by password, matrices, individual terminal, log
Default settings on ERP systems usually allow users far too much access to
data, so these systems must be modified to enforce proper segregation of
duties.
Sensitive data should be encrypted in storage and in transmission.
Parity checks, acknowledgment messages, and control totals should be
used to ensure transmission accuracy.
PSB and PEO can help provide security for data.
VPNs should be used to exchange data with service bureaus or PEOs.
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Informasi yang DihasiLkan PayroLL CycLe
Payroll system + cost data + HR yang

terintegrasi akan menghasilkan informasi:
Future
work force staffing needs

Employee performance
Employee morale,
Believe they have the opportunity to do what they do best.

Believe their opinions count.
Believe their coworkers are committed to quality.
Understand the connection between their jobs and the companys mission.
Payroll
processing efficiency and effectiveness
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HRM yang terintegrasi, manfaatnya
Kemudahan akses informasi

Aktivitas HRM bisa dilakukan lebih cepat dan efisien, sehingga
mengurangi cost
Mengurangi biaya perekrutan
Average cost of replacement is 1.5 times the employees annual salary.
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Terima Kasih
Jakarta,
10 Januari 2012
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HRM & Payroll Cycle

CONTROL, OBJECTIVES, THREAT, PROCEDURES

PayroLL CycLe: give cash get Labor

Keterkaitan PayroLL CycLe dengan Sistem/Bagian

Recruitment, discharge, pay-rate

Add and Deductions

actual hours worked

Tax rates, minimum pay-rate

Insurance, Bank, etc

Add and Deductions

Financial & tax, measurement, disclosure,

Aktivitas Utama PayroLL CycLe

Update payroll master file

Update tax rates and deductions

Validate time and attendance data

Calculate employer-paid benefits and taxes

Disburse payroll taxes and miscellaneous deductions

Deskripsi Aktivitas Utama PayroLL CycLe

Update payroll master file

new hires, terminations, changes in pay rates, etc

Update tax rates and

Validate time and

Hourly basis & fixed salary

Medical insurance, Retirement contribution,

Metode Pembayaran: Cash, Check & Direct Deposit

Disburse payroll taxes and

Penentuan Bonus/ Komisi yang baik

Needs: Account number & net pay amount (payroll

Eliminate cost (paper) and distribution

Eliminate floating time

Payroll Service Bureaus

Professional Employer Organizations

ControL, Objectives, Threat & Procedure

All transactions are properly authorized.

Threats in EmpLoyment Practices

THREAT 1: Hiring Unqualified Employees

Why is this a problem?

Can increase production expenses.

Threats in EmpLoyment Practices

THREAT 2: Violation of employment law

Why is this a problem?

Can result in stiff government penalties as well as civil suits.

Carefully document all actions relating to advertising, recruiting, hiring new

Threats in PayroLL Processing

THREAT 3: Unauthorized changes to the payroll

Why is this a problem?

Can increase expenses if wages, salaries, commissions, or base rates are

Proper segregation of duties

Threats in PayroLL Processing

THREAT 4: Inaccurate time data

Why is this a problem?

Can result in payments for services not rendered.

Automation can reduce unintentional inaccuracies

Threats in PayroLL Processing

THREAT 5: Inaccurate processing of payroll

Why is this a problem?

Errors damage employee morale, especially if they cause late paychecks.

Batch Total & Cross Footing