Smart Solution Sdn Bhd is a manufacturer of cell phone accessories in Kedah. Its Internal Audit department performs operational audits procedures on a regular basis. Mrs. Tanti, a senior internal auditor had been assigned to perform the internal audit at one of the Smart Solution's plant that is located at Gurun.
The objective of the audit is to review the payroll procedures currently employed by the plant. During her fieldwork, Mrs. Tanti reviewed the following flowchart that illustrates various payroll procedures implemented at Smart Solution's plant.

REQUIRED:                

(a)        Provide TWO (2) importance functions of job tickets at Smart Solution's payroll procedure.

  (b) Identify FIVE (5) control weaknesses in the payroll procedures at Smart Solution's       plant.

(c)       For each of the weaknesses identified in (b), briefly discuss ONE (1) potential risk exposure.

(d)      For each of the weaknesses identified in (b), suggest ONE (1) improvement in the internal control procedures to minimise its potential risk.

Please use the following format to answer questions (b), (c) and (d) above.       

(b) Weakness	(c) Potential risk exposure	(d) Improvement in the internal control procedures

Transcribed Image Text:

PRODUCTION Job ticket Time card Review and prepare personnel action form. Personnel action form Time card COST ACCOUNTING Job ticket Prepare labour distribution summary Labour distribution summary Job ticket Work-in- progress D PAYROLL Personnel action form Time card Prepare paycheck and update employee Personnel action form Time card Employee record Payroll register Paycheck Ⓒ ACCOUNT PAYABLE Paycheck Sign and distribute paycheck Cash disbursement voucher Paycheck Employees CASH DISBURSEMENT с Cash disbursement voucher Prepare check and update General Ledger Payroll register Cash disbursement voucher Payroll register General Ledger Check Bank PRODUCTION Job ticket Time card Review and prepare personnel action form. Personnel action form Time card COST ACCOUNTING Job ticket Prepare labour distribution summary Labour distribution summary Job ticket Work-in- progress D PAYROLL Personnel action form Time card Prepare paycheck and update employee Personnel action form Time card Employee record Payroll register Paycheck Ⓒ ACCOUNT PAYABLE Paycheck Sign and distribute paycheck Cash disbursement voucher Paycheck Employees CASH DISBURSEMENT с Cash disbursement voucher Prepare check and update General Ledger Payroll register Cash disbursement voucher Payroll register General Ledger Check Bank

Answer rating: 100% (QA)

a Two important functions of job tickets at Smart Solutions payroll procedure are Recordkeeping Job tickets serve as a record of the number of hours worked by each employee the tasks performed and the ... View the full answer