Accounting Procedures
Internal control procedures play a crucial role in detecting and averting fraud and ensuring an organization’s resources are protected. At the company’s level, internal control procedures link to the reliability of the accounting reports, timely communication, and compliance with laws and regulations. Therefore, effective internal control structure helps an organization to protect its assets, ensure the employees comply with the firm’s laws, and promote accuracy and reliability in accounting reports.
A company’s manager can recommend several internal control procedures to help in safeguarding the firm resources. One internal control procedure that can be applied is segregation of employee’s tasks. Segregating duties means that an employee will only be responsible for safeguarding one asset and keep financial report of that particular asset. Through segregation a company ensures that an employee cannot cover up theft of assets. Another recommendation a manager can recommend to keep the resources safe is assigning of specific responsibility to each employee ( Rae and Nava 119). That way, when any problem occurs the management will know who exactly to approach or who is responsible. In case of any lost records or wrong transactions then the responsible employee can be traced quickly. Also, rotating employees in work assignment can work as an effective recommendation. Rotating of employees in duties helps the company in preventing long term stealing schemes.
Appointing one employee for multiple duties is an ineffective control procedure. If an employee is assigned with various duties it is easy for them to cover up their fraud and also be reckless since it difficult to trace the mistakes. Both employment tax withholdings and employer payroll taxes are similar in concept but differ in one detail. Employment taxes are paid directly to the Internal Revenue Services (IRS) by the employer. Payroll taxes include social security and Medicare deducted from the employee’s pay by the employers and paid to IRS. Employment tax withholdings entails the taxes employers must pay to the government if they have employees while payroll taxes are those deductions related to form 941. Payroll management is a sensitive role of any company (Brittain 112). Effective management of a payroll system ensure that employees deductions are done correctly and earns the company trust with the employees and that is why it is important for the company to manage it payroll system.
Works cited
Bragg, Steven M. Payroll Management. Accounting Tools, 2015.
Brittain, John A. “The incidence of social security payroll taxes.” The American Economic Review 61.1 (1971): 110-125.
Rae, Kirsty, and Nava Subramaniam. “Quality of internal control procedures:Antecedents and moderating effect on organisational justice and employee fraud. ” Managerial Auditing Journal 23.2 (2008): 104-124.