Reference no: EM132529817

Nowadays, most of the medium and large companies have implemented a good system for payroll and their human resources. However, many smaller companies are still using separate payroll and human resources systems that employ many manual procedures. Mirza Enterprise is an example of a small company, which employs 30 production employees and has the following payroll procedures:

• The factory supervisor, who is Encik Sulaiman interviews and hires all job applicants. The new employee prepares a work form and gives it to the factory supervisor. Then, the factory supervisor writes the hourly rate of pay for the new employee at the corner of the work form and then gives the form to the payroll clerk, Mr. David, as a notice that a new employee has been hired. Encik Sulaiman verbally advises the payroll department of any subsequent pay raises.

• The payroll process begins when the company locates the empty time cards in a box near to the company entrance. Every Monday morning, the employees collect a time card and fill in their names. Every day, the employees have to punch in and out their time cards in a time clock placed near the main entrance to the company. At the end of the week, on Saturday, employees drop their time cards in a box near the entrance to the company. Then, a payroll clerk, Mr. David retrieves all the time cards from the box on Monday morning of the following week. After Mr. David reviews the time cards, employees will be automatically removed from the payroll file when they fail to turn in their time card.

• Paychecks are manually signed by the accountant, Encik Johan, and then given to the factory supervisor, who distributes them to employees. The factory supervisor, Encik Sulaiman, arranges the paychecks to any absent worker on payday.

Required:

Question 1: Identify EIGHT (8) weaknesses in current procedures, and explain the threats or consequences that Mirza Enterprise has to face if they allow the above situation to occur.