Objectives for Payroll

(a) To ensure that only valid employees are paid at the correct and authorized amount;
(b) To ascertained that the calculations of all payments and deductions are correct and
in accord with the relevant taxation and other regulations and requirements;
(c) To ensure that all deductions are correctly calculated and accounted;
(d) To ensure that unauthorized access to the payroll system and data is prevented;
(e) To ensure that all payroll transactions are accurately reflected in the accounting
system;
(f) To ensure that company is following all statutory laws and regulations.

Risk Issues for Payroll:

1. Is the payroll system adequately protected from either misuse or unauthorized
access?
2. What mechanisms prevent the set up of fictitious employees on the payroll system?
3. How can management be sure that only valid employees are being paid via the
payroll?
4. What prevents the set up of incorrect or inaccurate payroll data (i.e. salary rates)?
5. Are payroll salary rates correct in relation to agreed pay scales/national rates, etc.?
6. Are payroll payment transactions (i.e. overtime, bonus, salary increases, etc.)
adequately authorized (prior to data entry) and correctly entered?
7. What prevents the entry and processing of duplicated payroll payment data?
8. How can management obtain assurance that the payroll system accurately calculates
net salary and accounts for all disbursements?
9. What mechanisms prevent the incorrect calculation of income tax and any other
statutory deductions?
10. Are all exceptional payments adequately authorized?
11. Are pension and any other welfare deductions accurately calculated, deducted from
salary and accounted for as inputs to their target systems?
12. What mechanisms prevent staff fraud or malpractice in relation to payroll activities?
13. Are payroll runs adequately reconciled to the accounting system and anomalies
promptly identified and resolved?
14. Are payroll payments, automated fund transfer data or salary cheques subject to
adequate levels of authorization?
15. What prevents payroll payments continuing to be made to former staff members
who have left the organization?
16. How confidential is the payroll data and adequately protected from un-authorized
access?
17. Are all the necessary/statutory payroll outputs and forms accurately produced and
distributed in accordance with the required time tables?