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Payroll System and Internal Control

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aintain a list of the names, addresses and necessary information among others especially of the employees working within the organisation (Lambert, 2005).The importance of maintaining a payroll system lies in keeping a track upon certain specific data especially of the employees’ which include their salary and incentive structure, pension plans, union membership status and taxes along with the method of calculation regarding the pays of the employees by taking into consideration the available employee data. Payroll systems are mainly implemented by using different software in order to calculate the employees’ net pay from various deductions according to the norms and policies of a particular organisation (Mohammed amp. et. al., 2007)In relation to payroll system, payroll records are usually used or implemented in order to keep a proper record regarding the hours worked by the employees in an organisation on a monthly basis. Apart from the payroll records, a payroll ledger is also used in relation to payroll system. A payroll ledger is a kind of a table that shows the calculated pays of the employees along with the month in which they earned the pay (Mohammed amp. et. al., 2007)In relation to payroll system, an internal control can be regarded as a procedure of control and checking various levels of management in terms of financial and non-financial actions or operations of a particular business within an organisation in order to make sure that the business actions or operations are conducted successfully (Trenerry, 1999).The internal control of a business within an organisation also focuses towards the procedure of management decision making along with meeting all appropriate legal procedures that eventually leads towards the improvement of any business organisations (Hightower, 2008).The importance of internal control within an organisation lies in a few of the factors that include attaining successful business operations, controlling the business