INTERNAL CONTROLS

CONTROL DEFICIENY –
The payroll manager reviews the bank transfer listing prior to authorising the payments and also amends the payroll records for any changes required.There is a lack of segregation of duties as it is the payroll team which processes the amounts and the payroll manager who authorises payments. The manager could fraudulently increase the amounts to be paid to certain employees and process this payment as well as amend the records

CONTROL RECOMMENDATIONS-
The payroll manager should not be able to
process changes to the payroll system as well as authorise payments. The authorisation of the bank transfer listing should be undertaken by an individual outside the payroll department, such as the finance director

DOUBT-
1) woudn’t this control be ineffective since if the payroll manager fraudulently increase the amount to be paid for certain employees the payroll record would include this increased amount and so would the bank listing so even if the finance directors check bank listing(list of payment to be made) and payroll record they would agree so the FD might end up authorizing the increased amount to be paid?

2) How is this an effective control?

3) are the list of payment to be made with reference to payroll records?

THANKS YOU IN ADVANCE