Case 5 - Wendell Unity Products Company

Case 5 – Wendell Unity Products Company
The following scenario below is about Payroll Cycle (Hire to Retire Process).
You are assessing internal control deficiencies and how you can recommend proposals in
the payroll and personnel cycle for Wendell Unity Products Company, a manufacturing
company specializing in assembling kitchenware parts. Wendell employs approximately
two hundred seventy-seven salaried employees in three locations, Teresa Branch, Pureza
Branch, and El Pueblo Branch. Each location has one foreman who is responsible for
overseeing operations. The owner of the company lives in Rockwell, Makati, and is not
actively involved in the business. The two key executives are Leni, the vice president of
sales, and Rachel, the controller, and both have been employed by the company for more
than twenty years. New hourly employees are hired by the foremen at each location on
an as-needed basis. Each foreman recommends the wage rate for each new employee as
well as wage rate increases. The effectiveness of employees varies considerably, and
their wages are adjusted accordingly. All wage rates are approved by the controller.
Since each hourly employee works independently, Wendell has a highly flexible work
schedule policy, as long as they start after 7:00 a.m. and are finished by 6:00 p.m. Each
foreman has a supply of prenumbered time cards that they distribute to employees on
Monday morning. Because some employees do not start until later in the day several
time cards are kept in a box by the time clock for their use. Hourly employees use time
clocks to record when they start and stop working. Each Friday, after the employees
complete their work for the week, the foremen account for the time cards they
distributed, approve them, and send them by an overnight courier to the main office in
Sta. Mesa.
Ms. Gorgeous, the payroll clerk receives the time cards on Saturday and enters the
information using payroll software that prepares the checks or direct deposit
authorizations and the related payroll records. The checks are ready for the controller to
sign Monday morning. She compares each check to the payroll transactions list sent by
the payroll department and returns the checks using the same courier to each location.
The foremen pick up the checks and distribute each check to the appropriate employee.
If an employee is not present at the end of the day the foreman mails it to the
employee’s address.
Except for the foremen, all salaried employees work in the Sta. Mesa office which their
building is being leased to Berhel, the Artist. The vice president of sales or controller
hires all salaried employees, depending on their responsibilities, and determines their
salaries and salary adjustments. The owner determines the salary of the vice president of
sales and controller. The payroll clerk also processes the payroll transactions for salaried
employees using the same payroll software that is used for hourly employees, but all
salaried employees use direct deposit, so no check is prepared.
The payroll software has access controls that are set by the controller. She is the only
person who has access to the salary and wage rate module of the software. She updates
the software for new wage rates and salaries and changes of existing ones. The
controller’s assistant has access to all other payroll modules. Linda, the controller’s
assistant, has been taught to reconcile bank accounts and does the reconciliation
monthly.
Required
Prepare a list with a description of the following:
1. Identified control weaknesses/deficiencies/red flags.

2. Proposed recommendations in relation to items number 1.
Kindly create a recorded video with a 10-minute case study presentation and upload it in the
One drive folder under Case 5.
Please note the following:
1. You have the free will to present your case study, hence more flexible to you. Bare
minimum is to answer the questions in the above case.
2. All are required to present, kindly indicate your name in the video when presenting so
we can identify you during evaluation.
3. This case study will be graded as part of your formative assessment for the final
period.
4. The file can be in any video format (i.e. .mp4, .mov, .dat, etc.).
5. You also need to upload the pdf file of the powerpoint you will use for your recorded
video case study presentation.

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Case 5 – Wendell Unity Products Company

1. Identified control weaknesses/deficiencies/red flags.

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