ACCT INFO SYSTEM
ACCT INFO SYSTEM ACCT 322
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Jarvis Reilly DDS
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This 5 page Class Notes was uploaded by Jarvis Reilly DDS on Saturday September 26, 2015. The Class Notes belongs to ACCT 322 at Clemson University taught by Richard Dull in Fall. Since its upload, it has received 14 views. For similar materials see /class/214237/acct-322-clemson-university in Accounting at Clemson University.
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Date Created: 09/26/15
The Human Resource Management 8 Payroll Processes describes the basic roles played by an organization s human resources and payroll functions Human Capitol Management the process of managing how people are hired developed assigned and retained presumes that employees reflect a strategic investment rather than an administrative cost Process Definition and Functions Classic personnel management began with the handling of payroll and personnel administration and evolved by adding functions to handle recruiting employee relations etc as HR management realized the importance of personnel in achieving organizational objectives HCM philosophy based on 3 principles 1 Individual s value to organization is derived from job related knowledge skills attitude amp motivation 2 Human assets include full time permanent employees part time employees temporary employees and independent contractors Also w collaborative commerce arrangements it could include suppliers employees sales channel partners and customers 3 Person s relationship w an organization from hiring through termination must be nurtured to obtain maximum lifetime value Retaining an employee is less expensive than replacing one costs 25 times an employees annual salary plus benefits to replace Definition ofthe HR management process An interacting structure of people equipment methods and controls whose primary function is to create information flows that support 0 Repetitive work routines ofthe HR dept 0 Decision needs of those who manage the HR dept By 0 Capturing recording amp storing data concerning HR activities 0 Generating a variety of HR forms and documents 0 Preparing management amp governmental reports More than any other information process it captures records and stores data that falls outside the normal accounting oriented transaction stream Definition ofthe Payroll Process An interesting structure of people equipment methods and controls that creates information flows to support the repetitive work routines of the payroll dept 0 Traditionally been considered separate from HRMP but because of closeness many companies merge the 2 0 Events Oriented process Integration of the HR management 8 Payroll process Advantages gained by allowing the 2 process to share common data include 0 Creating a single source for obtaining HR info 0 Provides for faster data access 0 Minimizes data redundancy o Ensures data consistency and integrity 0 Facilitating data maintenance 0 Improving data accuracy The HR management Process 0 Organizational Setting 8 Managerial Decision Making VP of Human Resources Mgr safety Mgr of Mgr of Mgr of Mgr of health employee amp human personnel personnel services amp industrial resource planning amp appraisal amp benefits relations systems staffing development Table 141 describes key functions decisions amp info needs of each HR mgr 0 HR management process supplies managers w certain types of useful info 0 Technology Trends 8 Developments 0 HR self service systems have greatly improved the efficiency and effectiveness of the HR management process 0 Enterprise systems play a major role in implementing required HR amp payroll functionality 0 Implementing the HR management Process It is generally considered essential to record HR actions as soon as they are approved A number of reasons exist for immediately recording changes affecting employees including the need to ensure that each employee s paycheck reflects the employee s current status 0 Processing inputs I Selecting employees departmental supervisors amp managers outside the HR function may initiate to satisfy needs using the needs request screen or may be initiated by system automatically if programmed I Evaluating Employees managers and supervisors outside the HR function initiate actions affecting employees then mgr 5 typically approves review an initiates changes I Terminating employees Closes the employment process loop It is usually based on both quantitative amp qualitative data HR process keeps track of quantitative data 0 Processing Logic 8 Processing outputs HR requests initiated outside the HR department must be routed to and approved within HR department once approved data is updated and reports are made Outputs produced include I Feedback to employees concerning performance I Employment letter to new employees I Dismissal letters I reports to unions I reports to Equal Employment Opportunity I reports to Occupational Safety amp Health administration I reports to Dept of Labor 0 Key Data Tables 0 Employee Payroll master data helps management determine the total cost of its workforce t aids in setting hiring policies in the context of providing info for compliance with affirmative action measures Labor Force Planning data maintains data concerning an organization s short and long term staffing requirements Skills Inventory Data catalogs each employees set of relative skills continually updates The Payroll Process Generally falls under the authority of the controller s office 0 Logical Description of the Payroll Process 0 O O O 00 Process 10 perform data maintenance To begin the tax rates data is updated to ensure current tax rates are being used in preparing employee paychecks then 2 data flows enter the payroll process from departmental managers and supervisors I Attendance time records show time periods show the time period that employees are in attendance at the job site and available for work recorded near entrance of workplace I Job time records reflect start and stop time on specific jobs prepared by employees Process 20 reconcile hours worked Compares the total hours of each worker as shown by attendance record wjob time records hours should agree Process 30 distribute labor cost interfaces w the general ledger process to provide necessary journal entries for the distribution of labor charges Process 40 pay employees initiated by validated attendance time records I 41 prepare paychecks retrieves data from employeepayroll master data all employee info and tax rates data HR personnel enter data items into table control It then prints and distributes I 42 prepare disbursement voucher documentation to recognize liability I 43 prepare payroll transfer check sends check to bank to cover organizations periodic net payroll Process 50 Accrue liabilities accrues employer and withheld liabilities taxes Process 60 Prepares payments amp deposits initiated upon receipt of accrual notification data flow 0 Process 70 Prepare payroll tax reports assistance in satisfying govt tax regulations in preparing I Form 941 I Form W2 I Form 1099 r I Employee retirement income security act ERISA report 0 The Employee Payroll Master data Central repository of data about people who work for an organization each record contains identification data as well as data used for paycheck computation 0 Accounting Entries Related to the Payroll Process exhibit 141 0 Implementing the Payroll Process In most organizations payroll processing is done on a periodic process 0 Electronic time management system computer based system that captures stores and reports time 0 Payroll direct deposit pay sent to bank account 0 Payroll service bureau a company that specializes in rendering payroll services to client companies for a fee 0 Once data is approved he payroll system I Updates the employeepayroll master data amp distributes labor costs I Prepares employee s checks and sends to banks I Prepares outputs like pay stubs I Send payroll register to ap dept who prepare a disbursement voucher which is sent to cashier where a transfer is made 0 The Fraud Connection 0 Ghost employees median loss 275000 employees who don t work but receive checks 0 Falsified Hours 8 Salary median loss 30000 exaggerations 0 Commission schemes median loss 200000 falsify sales or increase commission rate 0 False workers compensation claims median loss 155000 fake injuries Measure used to prevent or detect schemes 0 Segregation ofduties 0 Direct deposit eliminates alteration forgery amp theft of paper checks 0 Checking for duplicate names amp addresses amp SS s on employee data 0 Compare actual budgeted payroll Employees are also reimbursed for business related expenses which can lead to fraud 0 Application of the Control Framework Operations process control goals 0 Effectiveness ofoperations provide employees with timely paychecks provide timely filing oftax returns and other reports w gov t agencies comply with requirements of payroll tax laws amp regulations 0 Efficient employment ofresources people and computers 0 Resource security Resource of interest include cash amp information resources residing on the employee payroll master data Control plans should eliminate unauthorized access of employeepayroll master data Information process control goals 0 IV valid time data 0 IC amp IA for the time data 0 UC amp UA for employee payroll master data Recommended Control Plans EXHIBIT 142 p524 526 Enter time data close to data s originating source Approve attendance time data amp job time data Reconcile attendance time data amp job time data Independent Paycheck distribution Use a payroll clearing account separate bank acct used solely for payroll Use an imprest payroll bank account the fund is reimbursed for the exact amount of the disbursements made from the fund When applied it requires that the amount of cash transferred from the general cash account to the payroll bank account be the amount of the total paychecks issued 0 O O O O O
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