CABALBAG, SUZETTE

CORPUZ, CHENLY RIZZA

LAM, PHOEBE KATE
MADRIAGA, IRRIZ
MANUEL, PAULINE KEITH
ORDILLAS, JAMAICA
OTANES, JASMAINE ANGELI
RIZALDO, SHANE
SERRANO, ELMA KRISTINA
TABADAY, KRISTINE BILLY

PAYROLL CYCLE
I. METHOD OF REPORTING

Role Play and Talk Show

First scene would be the members who will act as interviewers and the members who will act as
employees. The interviewer will ask some questions that will bring out information about
payroll. When the employees are answering the given question to the interviewer, another scene
will come out. This second scene will show the story (flashbacks) behind the answers of the
employees who are being interviewed but another person will portray this out. This scene will
also help the audience to better understand about the topic which is payroll.

II. ASSESSMENT TOOL

1. This is a basic activity and task that determine the employee’s time and attendance
data.

a. Validate data and attendance time

b. Validate time and attendance data
c. Prepare and disburse payroll

2. Complete the basic activity and task statement .Calculate _______ paid benefits and
taxes.

a. Employment
b. Employee
c. Employer

3. A basic activity and task that summarizes the hours provided by the employees, the
pay rates provide by the organization for employees.

a. Prepare Payroll
b. Prepare and Disburse payroll
c. Calculate employer paid hours, benefits and taxes

4. TRUE or FALSE: Hiring of larcenous employees is a threat to human resource or

payroll system.
 a. TRUE
b. FALSE
c. No other option ( alis na lang ako , upo na ako, pagod na ako)

5. Which is not a Payroll Processing?

a. Inaccurate time data

b. Inaccurate updating for payroll master data
c. Authorized changes to the matter payroll file

6. Which belongs to the general control issues?

a. Poor Performance
b. Loss or Authorized disclosure of payroll data
c. Theft or fraudulent distribution of paychecks

7. An employment practices that can result in stiff government penalties as well as civil
suits.

a. Inaccurate time data

b. Hiring of unqualified or Larcenous employees
c. Violation of employment law

8. TRUE or FALSE: Poor performance cannot damage employee relations but it may
reduce profitability.

a. TRUE
b. FALSE
c. TROLLS

9. Which action does not reduce threats of errors or regularities?

a. Restricting access to block documents to reduces risk of unauthorized transaction

b. Pre numbering documents that encourages recording valid transactions
c. Using simple, easy-to-complete documents with clear instructions that enhances
accuracy and reliability

10. The payroll system should be integrated with cost data and human resource
information so management can make decision with what issue/ issues?

a. Future work force staffing needs

b. Payroll processing efficiency and effectiveness
c. Employee morale
d. All of the above
Answers:
1. B 6. A
2. C 7. C
3. B 8. B
4. A 9. A
5. C 10. D

Scoring:
(ELIMINATION)

1st question- 3 points

2nd question - 5 points

3rd question - 8 points

4th question - 10 points

5th question - 12 points

6th question - 15 points

7th question - 18 points

8th question - 20 points

9th question - 25 points

10th question - 30 points

III. NOTES

OBJECTIVES:
 To prevent inaccurate payroll information
 To provide employees with the information they need to understand how they have been
paid and how much has been withheld
 To have fair and timely payroll information
 To provide processing transactional data about employee activities
 To secure the organizations assets
 To provide information for decision making

PAYROLL ACTIVITIES
Making payroll is probably one of the most important functions for any small-business owner.
This not only involves paying your employees but also depositing and filing payroll taxes. You
can choose to manage payroll yourself, hire a bookkeeper or use a payroll service. Failing to
pay and file quarterly payroll taxes can lead to fines, penalties and possibly jail time. Payroll
activities includes:
• Payroll Deposits
• Filing Employment Taxes
• Managing Payroll

HR ACTIVITIES
Human resource management deals with several employee-related activities in small
companies. It is essential that HR managers find talented employees to perform specific jobs
and help ensure that employees are fairly paid and looked after during their tenure. HR
management usually performs a variety of these activities throughout an average week. HR
Activities includes:
• Selecting and Hiring Employees
• Paperwork and Orientation
• Training and Development
• Compensation
• Performance Appraisals
• Safety and Health
• Managing Legal Issues

BASIC BUSINESS ACTIVITIES/TASKS:

a. Update master payroll file - to reflect payroll changes such as new hires, terminations,
changes in pay rates, or changes in discretionary withholdings. It is important that all
payroll changes are entered in a timely manner and are properly reflected in the next pay
period.
b. Update tax rates and deductions – these changes happen whenever updates about changes
in tax rates and other payroll deductions are received from various government units and
insurance companies.
c. Validate time and attendance data - it is to determine the employee’s time and attendance
data this activity is based on the status of the employees. Payroll system is responsible on
validating the employee’s time records. The organization may use time cards badge
readers or electronic time clocks.
Different pay schemes:
a. time cards for those paid on an hourly basis
b. self-report for professionals
c. straight commission or salary plus commission
d. incentives and bonuses
Procedures:
1. The payroll department is responsible for validating employee time
records.
2. For factory workers, validation involves comparing the total time worked
with the time spent on each job.

d. Prepare payroll - It is summarizing the hours provided by the employees, the pay rates
provide by the organization for each employees. The preparation of the payroll is
performed in the computer operations department. The file is sorted by different employee
number. In this activity all the deductions are summed and deducted in the gross pay, the
gross pay is computed by multiplying the pay rates and hours worked some kind of
deduction considered are the withholdings and voluntary deductions.
Types of payroll deductions:
a. withholdings
b. voluntary deductions

e. Disburse Payroll
Procedures:
1. Once paychecks have been prepared, the payroll register is sent to the
accounts payable department for review and approval.
2. A disbursement voucher is then prepared.
3. The disbursement voucher and payroll register are then sent to the cashier
Some opportunities of using information technology to disburse payroll.
a. direct deposit
b. outsourcing to a payroll service bureau

f. Calculate employer paid benefits and taxes- This activity involves paying payroll tax
liability and other deductions of each employee .Some employee’s payroll taxes or
employee benefits are paid directly by the employer and it is usually deducted to the
employee’s gross pay. Many of the businesses also provide benefits for their employees
and employees are also offered and contribute toward a choice of retirement saving plan.
 g. Disburse Payroll taxes and miscellaneous deductions – The company must periodically
prepare checks or EFT to pay tax and other liabilities.
 The timing of these payments is specified by the respective government
agencies.
 The funds voluntarily withheld from each employee’s paycheck for
various benefits must be disbursed to the appropriate organizations.

DATA PROCESSING OPERATIONS:

DECISIONS MAKING:
a. The payroll system should be integrated with cost data and human resource information
so management can make decisions with certain issues such as: (1) Future work force
staffing needs,(2) Employee performance,(3) Employee morale, (4)Payroll processing
efficiency and effectiveness

MAJOR THREATS AND CONTROLS:

Threats to human resource or payroll system:

EMPLOYEMENT PRACTICES
1. Hiring of unqualified or larcenous employees- this threat can increase production
expenses, it can result theft assets and can result in civil and criminal penalties in the
business
Controls: state skill qualifications, ask candidates to sign a statement confirming
the accuracy of the information

2. Violation of employment law –can result in stiff government penalties as well as civil
suits
 Controls: document all actions relating to advertising, recruiting, hiring new
employees, and dismissal of employees, provide employees with continual
training to keep them current with employment law

PAYROLL PROCESSING
3. Unauthorized changes to the master payroll file-can increase expenses if wages
,salaries, commissions, base rates are falsified and result inaccurate reporting and
erroneous decisions
Controls: proper segregation of duties and restrict logical and physical access to
the payroll system

4. Inaccurate time data-can result in payments for services not rendered, inaccurate missing
checks can damage employee morale, and result inaccurate labor reporting
Controls: Automation can reduce unintentional inaccuracies, data entry
programs should include edit checks, and segregation of duties can reduce intentional
inaccuracies, time clock data should be reconciled to job time tickets by an independent
party, supervisors should approve all time cards and job time tickets

5. Inaccurate updating of payroll master data-Errors damage employee morale ,especially

if they cause late paychecks
Controls: batch totals, cross-footing of payroll register

6. Theft or fraudulent distribution of paychecks – payments to ghost employees or

terminated employees may result to overvaluation of increase in expenses and loss of
cash
Controls: restrict access to blank payroll checks and check signing machine, all
checks should be sequentially pre-numbered and accounted for periodically

GENERAL CONTROL ISSUES

7. Loss or unauthorized disclosure of payroll data- Loss or alteration of payroll data can
result in delayed and inaccurate paychecks and reports and unauthorized disclosure of
confidential employee data can violate state and federal laws and damage employee
morale
Controls: payroll file should be backed up regularly, all disks and tapes should
have external and internal file labels to reduce chance of accidentally deleting tan
important data, access controls should be utilized

8. Poor performance-may damage employee relations and reduces profitability

Controls: prepare and review performance reports

 ACTIONS THAT MAY REDUCE THREATS OF ERRORS OR IRREGULARITIES:
 Using simple, easy-to-complete documents with clear instructions (enhances accuracy
and reliability)
 Using appropriate application controls, such as validity checks and field checks
(enhances accuracy and reliability)
 Providing space on forms to record who completed and who reviewed the form
(encourages proper authorizations and accountability)
 Pre-numbering documents (encourages recording valid transactions)
 Restricting access to blank documents(reduces risk of unauthorized transactions)

CONTROL PROCEDURES:
1. Sound hiring practices (verification of job and applicant’s skill, reference and
employment history)
2. Thorough documentation of hiring procedures, performance evaluation, and dismissal
procedures
3. Segregation of duties
4. Batch totals and application controls
5. Direct deposits
6. Paycheck distribution by someone independent of payroll process
7. Investigation of all unclaimed paychecks
8. Separate payroll checking account
9. Access control
10. Back up and disaster recovery procedures
11. Encryption
12. Restriction of access to master data
13. Criminal background investigation checks of all applicants for finance-related positions
14. Data processing integrity controls
15. Review changes and restriction of access to master data