PPT On PAYROLL AND FIXED ASSETS MANAGEMENT

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PAYROLL AND FIXED ASSETS MANAGEMENT Presentation Transcript:
1.PAYROLL AND FIXED ASSETS MANAGEMENT

2.Payroll &Time Management
A. Main Existing Procedures
A personal file is maintained for each employee.
Time sheets are not maintained.
Severance pay are accrued for but not maintained in a separate bank account.
Salaries are not declared to income tax department.
Salaries are paid through cheques.

3.B.Identified Weaknesses
No time sheets are prepared by each employee and therefore, time can not be properly allocated to projects.
Payroll income taxes are not deducted and paid to tax department.
No bank account is maintained for severance pay and provident fund.  

4.C.Risks
Payroll expenses may not be properly allocated to various projects.
Weakened controls over the time of employees.
Difficulty in reasonably allocating overhead expenses to projects.
Non-compliance with prevailing tax laws and therefore penalties may be imposed on the entity.
Physical cash may not be available to finance the employees’ severance pay and provident fund. 

5.D.Recommendations
Time sheets should be prepared by each employee on regular basis (monthly or by-weekly), which should be reviewed and approved by the employees supervisor.
Payroll income taxes should be calculated, withheld and paid to the tax department on monthly basis.
Funds for employees’ severance pay and provident fund should be maintained in a special bank account and should not be used for any other purposes.     

6.Fixed Assets
A.Main Existing Procedures
Fixed assets are expended at the time of purchase.
No fixed assets register is maintained.

7.B.Identified Weaknesses
Fixed assets are expended at the time of purchase.
No fixed assets register is maintained.
No insurance is maintained for fixed assets.     

8.C.Risks
Fixed assets may be lost in case of fire or theft.
Financial periods of the entity will not be reasonably charged with the cost of fixed assets.
Loose control over fixed assets.

9.D.Recommendations
Fixed assets should be capitalized and depreciated over their estimated useful lives.
Fixed assets register should be maintained.
Fixed assets should be insured against fire and theft.
Fixed assets tags should be used to control location and responsibility of each fixed assets item.