1. Divide the class into six groups. Three groups work on Payroll System and the rest on Fixed Asset System 2. Design a Context Diagram 3. Design a DFD 4. Design a Flowchart 5. Identify and describe at least three weaknesses of the payroll process 6. Propose solutions to strengthen the internal controls 7. Create a 3–7 minute video explaining the five tasks above in a clear, fun and engaging way. Include all the diagrams and flowchart, and a brief discussion of the weaknesses and the proposed solutions. The video may include animation, role-play, narration, or creative storytelling. Choose the most relevant and time effective methods. 8. Submit the video in MP4 format or link to uploaded video PAYROLL SYSTEM
UNESA Industries manufactures and sells engine parts for large industrial equipment. The company employs more than 1,000 workers for three shifts, and most employees work overtime when necessary. The procedures to process payroll as follows: 1. Input Collection Employees Punch Time Clock: Employees record their working hours using a time clock, generating Time Cards. Personnel Prepares Original Payroll Information: The HR or personnel department compiles employee payroll-related data such as new hires, terminations, salary changes, and deductions, usually using an Authorization Form. 2. Data Processing Payroll Tax Service: Monthly updates are made to ensure compliance with tax regulations. Post Payroll Information: Payroll information is posted into the system to update the Payroll Master File. Calculate Overtime and Shift Differential Rates: Any adjustments for overtime and differential pay rates are calculated by the HR department, and these are also incorporated into the Payroll Master File. Backup: A database backup of the updated payroll master file is created for data security and recovery purposes. 3. Payroll Preparation Review Time Cards for Accuracy: The time cards are checked to ensure the recorded hours are accurate and align with company policies. Prepare Employee Payroll: Using the time cards and payroll master file data, employee payroll is calculated. Review Weekly Payroll Register on Monitor: The calculated payroll data is reviewed on a monitor to ensure correctness. Reconciliation Check: A decision point checks whether the Payroll Register Matches the Time Cards: o If No: The process loops back to adjust and recalculate payroll. o If Yes: The process moves forward to finalize payroll. 4. Payroll Finalization Process Payroll Checks: After reconciliation, payroll checks are processed. Prepare Journal Entry: The payroll register is used to prepare a journal entry for accounting purposes. Post to General Ledger: The journal voucher is posted to the general ledger to reflect payroll expenses in financial records. 5. Distribution Distribute Paychecks to Employees: The finalized paychecks are distributed to employees. 6. Integration and Controls The HR department plays a role throughout the process in verifying accuracy and ensuring proper authorization. Backup procedures ensure data security and allow recovery in case of system failure. The use of a payroll register and journal vouchers ensures financial records remain accurate and compliant. Additional information about payroll procedures follows: • The HRM department determines the wage rates of all employees. The process begins when a form authorizing the addition of a new employee to the payroll master file is sent to the payroll coordinator for review and approval. Once the information about the new employee is entered in the system, the computer automatically calculates the overtime and shift differential rates for that employee. • A local accounting firm provides Arlington with monthly payroll tax updates, which are used to modify the tax rates. • Employees record their time worked on time cards. Every Monday morning, the previous week’s time cards are collected from a bin next to the time clock, and new time cards are left for employees to use. The payroll department manager reviews the time cards to ensure that hours are correctly totaled; the system automatically determines whether overtime has been worked or a shift differential is required. FIXED ASSET
Surabaya Co. is a manufacturing company that relies on fixed assets like machinery and equipment to support its operations. To manage these assets effectively, the company has a structured Fixed Asset Management System covering asset acquisition, payment processing, usage, depreciation, and disposal. This system ensures coordination between departments such as the User Department, Cash Disbursements, and General Ledger. By maintaining accurate records and strong internal controls, Surabaya Co. ensures efficient asset management and compliance with financial standards. This process supports the company’s operational and financial goals.
The fixed asset acquisition and maintenance procedure as follows:
1. Vendor Process Purchase Order: The vendor receives a purchase order (PO) from the user department. Invoice: The vendor sends an invoice to the user department upon delivery of the asset. 2. User Department Process Prepare Purchase Order (PO): The user department prepares a purchase order and sends it to the vendor. Receive Asset and Invoice: Upon delivery, the user department receives the asset along with the vendor's invoice. Receiving Report: The department generates a receiving report to confirm asset delivery and quantity. Maintain Usage Records: After asset acquisition, the user department maintains usage records for the fixed assets, ensuring proper documentation and control. 3. Cash Disbursements Process Invoice Verification: The cash disbursements department processes the invoice, matching it with the receiving report to ensure consistency and accuracy. Make Payment and Update Records: Payments are made to the vendor based on the approved invoice, and the payment details are recorded in the Cash Disbursement Journal. Check Issuance: A check is issued to the vendor as payment. A copy of the check is kept for records. Journal Voucher Preparation: The department prepares journal vouchers for recording the asset acquisition. 4. Fixed Asset Records Fixed Asset Sub Ledger: The fixed asset information (e.g., acquisition cost, date, and location) is updated in the fixed asset sub-ledger. Asset Summary: Summaries of the asset details are generated periodically for review. Depreciation Report: Usage data is used to calculate depreciation, which is recorded in a Depreciation Report. Disposal Report: If assets are disposed of, details are recorded in the Disposal Report for proper tracking. 5. General Ledger Process 1. Journal Voucher Posting: Journal vouchers are used to update the general ledger for both asset acquisition and depreciation. 2. Update General Ledger Accounts: Fixed asset accounts in the general ledger are updated to reflect all financial transactions related to the assets. 6. Integration and Controls Regular updates to the Fixed Asset Sub-Ledger ensure accuracy in tracking and reporting asset values. Depreciation and Disposal Reports integrate with the general ledger to maintain accurate financial statements.
