question archive Quick Kick Company manufactures a popular brand of footballs
Quick Kick Company manufactures a popular brand of footballs
Subject:AccountingPrice:2.89 Bought3
Quick Kick Company manufactures a popular brand of footballs. Quick Kick employs 142 workers and keeps its employment records on time sheets that show how many hours the employee works each week. On Friday the shop foreman collects the time sheets, checks them for accuracy, and delivers them to the payroll department for preparation of paychecks. Te treasurer signs the paychecks and returns the checks to the payroll department for distribution to the employees.
Identify the main internal control weakness in this situation, state how the weakness can hurt Quick Kick, and propose a way to correct the weakness.
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The main internal control weakness is that the payroll department both prepares and distributes the paychecks. With both duties, a dishonest person in the payroll department can create a time sheet for a fictitious employee and then keep the related paycheck after the treasurer returns the signed checks to the payroll department.
To correct this weakness, Quick Kick should have someone other than the payroll department or the shop foreman distributes paychecks to employees. For example, the human resources department, which has no control over the time sheets or the paychecks, could distribute paychecks to the workers.
