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HR Payroll System Overview and Risks

The document discusses the payroll cycle and processes. It covers payroll inputs which include employees, agencies, and the human resources management department. It also discusses payroll outputs like payments to banks, employees, and accounting. The document outlines risks to the payroll system from threats like unauthorized changes, inaccurate timekeeping, and payroll theft. It notes that many companies outsource payroll processing for benefits like reduced risks. Finally, it provides an example of how a human resources management system can incorporate modules for tasks like recruitment, competency management, and performance appraisal.

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10 views20 pages

HR Payroll System Overview and Risks

The document discusses the payroll cycle and processes. It covers payroll inputs which include employees, agencies, and the human resources management department. It also discusses payroll outputs like payments to banks, employees, and accounting. The document outlines risks to the payroll system from threats like unauthorized changes, inaccurate timekeeping, and payroll theft. It notes that many companies outsource payroll processing for benefits like reduced risks. Finally, it provides an example of how a human resources management system can incorporate modules for tasks like recruitment, competency management, and performance appraisal.

Uploaded by

umergujjar7
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd

HR / Payroll Cycle

ATG 383 - Spring 2002


Overview
• Operation of Payroll System
• Risks and Controls for Payroll System
• Accounting for Human Resources
Payroll Inputs for Process 1.0
• Employees
• Various agencies
• HRM
– Why are some payroll related functions
located in HRM department?
Payroll Inputs for Process 2.0

• Revenue Cycle

• Various Departments or Employees


– Who is responsible for reviewing and
editing payroll input?
Payroll Outputs for Process 4.0
• Bank
– Special Payroll Account
• Employees
– How to disburse funds?
• G.L. System
Payroll Outputs for Process 5.0
• G.L. System
• Various Agencies
Not shown on DFD –
Still part of payroll process

• Answer inquiries about payroll


• Issue reports on payroll activities
– Internal use: management and cost accounting
– External use: employees and government
• Independent reconciliation of payroll
account.
Payroll Cycle Risks and Threats
Threats Primarily Addressed by HRM

• Hiring unqualified
employees
• Violation of employment
law
• Inappropriate incentive
compensation
Threats the Payroll System Can Address
• Unauthorized changes to
payroll master file
• Inaccurate time data
– What if employee X clocks in
for employee Y?
Threats the Payroll System Can Address

• Inaccurate payroll processing

• Theft or fraudulent distribution


of paychecks
Threats the Payroll System Can Address

• Loss or unauthorized
disclosure of data
Outsourcing Payroll Processing
• Many companies use
an outside service
bureau for payroll
– Benefits?
– Risks?
Accounting for Human Resources
Example of HRM System
Source: [Link]
Core HRM System
• Biographical data
 Name, address, employee id.
 Service history.
 Competencies.
• Establishment (Position) Data
Position title.
Requirements.
Position occupancy
History
Recruitment Module
 Administer advertising of vacant positions
 Generate advices to applicants
 Archive unsuccessful applicant records
 Administer EEO incident claims
Competency Management
 Assemble and analyze corporate training needs
 Identify corporate and individuals' skills deficits
 Match competencies to position, project, and
workforce requirements
 Identify training strategies which impact on
employee performance
Performance Appraisal
 Administer employee performance plans and
appraisals
 Ensure that performance appraisals and plans are
conducted on schedule
 Record performance assessments and decisions
concerning employee performance
 Record employee comments concerning their
performance assessments

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