Payroll Tulipa Co's warehouse and store employees each work 40 hours per week and are paid...

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Payroll Tulipa Co's warehouse and store employees each work 40 hours per week and are paid monthly by bank transfer. The company has a human resources department and a payroll department which processes the salaries. All members of the payroll department are able to access the payroll system and make amendments to employees' standing data. The standard hours per employee are automatically set up in the system, along with the hourly wage rate, and the system automatically calculates the gross and net pay along with relevant deductions. As the process is automated, no checks over this calculation are performed. On a monthly basis, the senior payroll manager reviews the list of bank payments and agrees it to the payroll records prior to authorising the payment. If any errors are noted, the payroll senior manager amends the records. Monthly management accounts are produced which detail variances between budgeted and actual amounts. Revenue and key operating expenses are detailed, but as there are no overtime costs, wages and salaries are not analysed. Purchases Tulipa Co has a purchasing department based at its head office. When goods are required, a clerk raises the purchase order and sends all orders for authorisation. A copy of the authorised order is sent to the warehouse department. On receipt of goods, the quantities and quality of goods received are checked by a warehouse assistant against the supplier's delivery note, and a sequentially numbered multi-part goods received note (GRN) is produced. Once purchase invoices are received and authorised for payment, an accounts clerk logs these invoices into the purchases account in the general ledger. Although the system has a range of controls available, only existence check information processing controls are used. Due to staff shortages in the finance department, supplier statement reconciliations are no longer performed. (c) Identify and explain FIVE DEFICIENCIES in Tulipa Co's PURCHASES AND PAYROLL systems and provide a control recommendation to address each of these deficiencies. (10 marks) (20 marks) X 0 Paragraph S Q B I US X₂ X² Tx 三 三 3:31:3 EE Control deficiency Control recommendation Payroll Tulipa Co's warehouse and store employees each work 40 hours per week and are paid monthly by bank transfer. The company has a human resources department and a payroll department which processes the salaries. All members of the payroll department are able to access the payroll system and make amendments to employees' standing data. The standard hours per employee are automatically set up in the system, along with the hourly wage rate, and the system automatically calculates the gross and net pay along with relevant deductions. As the process is automated, no checks over this calculation are performed. On a monthly basis, the senior payroll manager reviews the list of bank payments and agrees it to the payroll records prior to authorising the payment. If any errors are noted, the payroll senior manager amends the records. Monthly management accounts are produced which detail variances between budgeted and actual amounts. Revenue and key operating expenses are detailed, but as there are no overtime costs, wages and salaries are not analysed. Purchases Tulipa Co has a purchasing department based at its head office. When goods are required, a clerk raises the purchase order and sends all orders for authorisation. A copy of the authorised order is sent to the warehouse department. On receipt of goods, the quantities and quality of goods received are checked by a warehouse assistant against the supplier's delivery note, and a sequentially numbered multi-part goods received note (GRN) is produced. Once purchase invoices are received and authorised for payment, an accounts clerk logs these invoices into the purchases account in the general ledger. Although the system has a range of controls available, only existence check information processing controls are used. Due to staff shortages in the finance department, supplier statement reconciliations are no longer performed. (c) Identify and explain FIVE DEFICIENCIES in Tulipa Co's PURCHASES AND PAYROLL systems and provide a control recommendation to address each of these deficiencies. (10 marks) (20 marks) X 0 Paragraph S Q B I US X₂ X² Tx 三 三 3:31:3 EE Control deficiency Control recommendation

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Based on the information you provided we can identify and explain five control deficiencies in Tulipa Cos payroll and purchasing systems as well as pr... View the full answer