Question 1

For each the following situations, evaluate the segregation of duties and describe any deficiency that you found. Indicate possible error that might occur because of the inadequate segregation of duties. Recommend the additional control that should be implement by the company.

Situations:

1. The company's payroll is computerized and is handled by one person in charge of payroll who is responsible for keying all weekly time reports into the computer system. The payroll system is password protected so that only the payroll person can change pay rates or add/delete company personnel to the payroll file. Payroll checks are prepared weekly, and the payroll person batches the checks by supervisor or department head for subsequent distribution to employees