Course Content
New Accounting Model (Exam-2009)
Books references: 1. Account Code (Volume III). 2. Chart of Accounts (Issued by CGA). 3. Manual Accounting Principles. 4. Accounting Policies and Procedures Manual.
Private: DAO Part-I Examination 2024 (Fresh Candidates) Past Papers
About Lesson

Write note on how to have good internal controls to support an efficient and reliable payroll system.

Certainly! Establishing effective internal controls is crucial for maintaining an efficient and reliable payroll system. Here are some best practices to consider:

  1. Open a Separate Payroll Bank Account:

  2. Limit Access to Payroll Records:

  3. Separate Payroll Duties:

  4. Conduct Regular Payroll Audits:

    • Purpose: Ensure accuracy and compliance.
    • Action: Regularly review payroll records, calculations, and processes. Look for discrepancies or anomalies. Audits help identify issues early2.
  5. Establish a Change Authorization Process:

    • Purpose: Control changes to payroll data.
    • Action: Implement a formal process for authorizing changes (e.g., salary adjustments, tax withholding changes). Require approvals and documentation1.
  6. Use Software for Time Sheet & Payroll Verification:

  7. Perform a Final Payroll Review:

  8. Regularly Review Your Payroll Trends:

    • Purpose: Identify patterns or anomalies.
    • Action: Analyze payroll data periodically. Look for trends, unexpected changes, or irregularities. Address any issues promptly1.

Remember, robust internal controls not only protect your business but also instill confidence in employees regarding accurate and timely payroll processing13.

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