Payroll Fraud And Accounting Information Systems - 1391 Words

Payroll Fraud and Accounting Information Systems Stephanie Ace and Nisha Selvam Payroll systems have evolved tremendously as software and computerized systems have spread throughout the workplace. While this has alleviated some of the hassle involved with processing payroll, it has also opened up a world of potential issues. Oftentimes, systems that appear both effective and efficient can become vulnerable if placed in the hands of dishonest employees or employers. Ultimately, while accounting information systems have resulted in exponential growth to the payroll system, it is also important to consider the possible weaknesses that lie beneath the surface. Defining Payroll Fraud According to a 2012 article from Pay and Benefits Magazine, payroll fraud is defined as â€Å"the unauthorized altering of payroll or benefits systems in order for an employee to gain funds which are not due,† (â€Å"Payroll Fraud†). This illegal practice takes up a relatively large percentage of an organization’s expenditures. According to a 2014 study by the Association of Certified Fraud Examiners, it is estimated that the typical organization loses 5% of revenues each year to fraud. The average loss due to fraud was $145,000 and the average timeframe that fraud escaped detection for nearly 18 months. In addition, of the cases reviewed, 22% involved amounts above $1 million (About the Report). Based on these figures, the importance of preventing and detectingShow MoreRelatedIntegrated Cases Chapter 51130 Words   |  5 Pages2011 Information Management Immediate Issues or Problems * Is there an existing fraud in the payroll system of Northwest Industries? * What courses of action should be done by Northwest Industries to prevent and detect fraud? Basic Issues or Associated Issues * All of the 1,500 company employees of Northwest Industries had a discrepancy between their reported withholding and the actual amount withheld. * The W-2 of Don Hawkins, a programmer in charge of the payroll systemRead MoreInternal Control Of A Business955 Words   |  4 PagesFor a business to limit fraud capabilities, it is important to have a strong set of internal control. â€Å"Internal control is the organizational plan and all the related measures designed to . . . safeguard assets, encourage employees to follow company policies, promote operational efficiency and ensure accurate reliable accounting records† (Miller-Nobels, Mattison, Matsumura, 2016). When establishing internal control, it is important to remember the necessary components: control procedures, riskRead MoreA Brief Note On Fraud And Small Businesses1565 Words   |  7 PagesVictims - Fraud in Small Businesses, 2016). Both large and small companies require a certain amount of protection from fraudulent acts. To be naive in thinking that fraud would never occur within a company would be reckless. There are three key objectives when operating a business, whether large or small. These objectives include prevention, detection, and response, and should be implemented into every companies operations. When exploring preventative techniques, there a seven recommendations madeRead MoreAccounting Information Systems Essay921 Words   |  4 PagesAccounting Information Systems Laquasia Fields XACC/210 May 26, 2013 Cito Vanegas Every Company or Business has different Information Systems that the use to run the Company. There are various types of information systems employed by payroll, accounts payable, accounts receivable, and accounting? Types of Information systems that are employed by payroll, accounts receivable, and accounts payable are Paychex, UltiPro Payroll Software, ADP Payroll services, Intuitive PayrollRead MoreEssay on Sandwich Aat1368 Words   |  6 Pagesthe accounting systems and procedures within Sandwich Master Ltd (SML). The report will highlight areas of concern within the organisation and any lapses in relationship or communication problems between various accounts functions of SML accounts team. The report is being prepared on the instructions of George Bartlett, the finance Director and part owner of SML. 2. The report is also prepared to meet the AAT requirements, as stated in the internal controls and accounting systems unitRead MoreGhost Employees659 Words   |  3 PagesGhost Employees As long as a company has a payroll office, the risk of having a ghost employee exists. A ghost employee refers to someone, either real or fictitious, who is on the company’s payroll but does not actually work for the company. A ghost employee is most frequently a recently departed employee, a made-up person, or a friend or relative of the fraudster who created the employee. There are a few steps that are taken in order for the ghost employee to be successfully added. First, theRead MoreInternal Control in Accounting System1516 Words   |  7 PagesAAT Learning and Assessment Area ‘Internal Control and Accounting Systems.’ | |The objectives of this report are to: | |a)analyse accounting system and effectiveness of its internal control | |b) to identify the strengths and weaknesses of accounting system and to recommend necessary improvements or funding changesRead MoreComputer Information System Brief Essay1231 Words   |  5 PagesComputer Information System Brief Jeannie Earling ACC/542 Accounting Information Systems Sanders Moran July 16, 2012 Kudler’s business and accounting information needs Kudler Fine Foods is a gourmet food specialty store that provides consumers with an alternative to traditional grocery stores. It gives consumers options for shopping whether they are trying to find gourmet ingredients for a special meal or wine for a dinner party. Kudler has three stores in the following locations in theRead MoreKudler - Internal Control and Risk998 Words   |  4 Pagescontrol system are to ensure efficient and effective operations, accurate financial reporting and compliance with laws and operations† (COSO, 1999). Proper internal control programs can help Kudler’s managers to make decisions, progress evaluations and mitigate risks, however, all risks will not be able to be eliminated. The following information will provide some insight into the internal controls and risks that Kudler Fine Foods should be aware of. Internal Controls and Risks Payroll The payrollRead MoreTrolley Dodgers Case2066 Words   |  9 PagesExecutive Summary The Trolley Dodgers was exposed that it had internal control problems existed. The other hand, found that employees embezzlement. The first part of this report identify and explain the characteristics of employee fraud indicated in Dodgers case. such as perpetrator must gains the trust or confidence of the person or company being defrauded. etc And then, the second part is explain the internal control weaknesses and understanding internal control objectives . The third part based