Payroll Accounting Cycle Essay

The paysheet Accounting Cycle or payroll Cycle is basically a process for recording time and attendance and converting that information into payroll calculations and payroll disbursements (Robertson, 2003). This cycle covers all activities related to payroll from hiring and firing to pay distribution.The payroll cycle has four basic stages recruitment, which covers the appellative of vacant positions, advertising for the vacancies, and selection of a candidate for hire, time and attendance, which is a record of all the work hours of the employees, salary distribution, which involves the depositing of paychecks into the employees account, and unfunded liability, which determines the unfunded one-year leave and separation pay ( paysheet Cycle, 2005).The most important internal chink process in the Payroll Accounting Cycle is the division of duties (Bierstaker, 1997). downstairs this look into process, the main tasks should be handled by different people.This means that processes such(prenominal) as the hiring and firing of personnel and the management of labor relations, the supervision citation of work time, the preparation and timekeeping of payroll, the payroll check preparation and related payroll reports as well as the payroll distribution and actual appreciation of checks and its subsequent distribution to employees, should all be handled by five divulge auditors to ensure the integrity and accuracy of the Payroll Cycle (Robertson, 2003).Another specialized internal control in the Payroll Cycle is by implementing imprimatur requirements. This basically acts as a checks and balance feature in the Payroll Accounting Cycle (Bierstaker, 1997). In this control process, the pay base data, which is the data on which pay is based including factors such as hours, piece cast volume, and incentives, and personnel hiring and firing decisions, should all be initially approved by a supervisor or an independent department (Robertson, 2003).Providing that all these controls ar enforced properly, there should be no relative weaknesses in the Payroll Cycle. There are probabilities however that the internal control systems will go to detect material misstatements. The methods that can be used to identify the strengths and weaknesses in the Payroll Accounting Cycle of a business involve measured auditing, risk assessment and control risk assessment (Bierstaker, 1997).In conducting control risk assessments it should always be remembered that if the control risk is assessed very low, all-important(a) audit procedures can be limited in cost-saving ways. If it is assessed very high, all-important(a) procedures will need to be designed to lower the risk of flunk to detect material misstatement in the account balances (Robertson, 2003). There is no accurate Payroll Accounting Cycle and control measures should always be implemented and audited periodically.