What duties should be segregated in the payroll cycle?
The company should segregate human resources, payroll accounting, and the treasurer.
Each role is responsible for the following:
1) Human resources – This can be performed by the human resources department hiring new employees and maintaining records of the employees hire date and salary information.
2) Payroll (accounting) – Supervision can be assured by proper approval of an employees work data (e.g. hours worked, vacation time, sick days etc.). Payment data should be based on hours worked on completed jobs (timekeeping).
3) Treasurer (payroll check preparation) – The payroll department should separate those who distribute payment to staff.
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