AUI 3702
ASSIGNMENT 2
SEMESTER 2 2024
This document should be used as a guideline.
, Japan manufactures cars, Mitsubishi Limited is a manufacturing company with a large labour force. The
company operates a cashless wage system. The company takes its internal control seriously, including
sound division of duties. The following control procedures are carried out within the payroll cycle.
a) When amendments to pay rates have been authorised by the wage committee/union, they are
recorded on a standard amendment form, which is cross-referenced to the authorising document.
b) The entry/exit point to the factory is supervised by security personnel at the start and end of work
shifts.
c) At the end of the wage period, the production foremen (three sections, each with their own foreman)
receive a report on the normal and overtime hours worked by employees in their section which they
must authorise before wages are processed.
d) The software produces a period-to-period wage reconciliation, which is reviewed by the financial
controller.
e) Each employee is handed a payslip, which provides a breakdown of the amount deposited in his or her
bank account.
f) The software calculates the amounts to be deducted from employees in respect of the repayment of
staff loans.
g) The financial controller inspects the cash payments journal to confirm that taxation deducted from
employees is promptly paid over to the South African Revenue Services.
h) Background checks are carried out on all prospective skilled workers before they are employed.
I) The financial controller carefully checks all details on the on-screen schedule of electronic wage
payments before “releasing” it to the bank for payment.
j) Warning letters are sent to employees who are persistently late for work. Describe the purpose of
each of the above internal controls a to j
ASSIGNMENT 2
SEMESTER 2 2024
This document should be used as a guideline.
, Japan manufactures cars, Mitsubishi Limited is a manufacturing company with a large labour force. The
company operates a cashless wage system. The company takes its internal control seriously, including
sound division of duties. The following control procedures are carried out within the payroll cycle.
a) When amendments to pay rates have been authorised by the wage committee/union, they are
recorded on a standard amendment form, which is cross-referenced to the authorising document.
b) The entry/exit point to the factory is supervised by security personnel at the start and end of work
shifts.
c) At the end of the wage period, the production foremen (three sections, each with their own foreman)
receive a report on the normal and overtime hours worked by employees in their section which they
must authorise before wages are processed.
d) The software produces a period-to-period wage reconciliation, which is reviewed by the financial
controller.
e) Each employee is handed a payslip, which provides a breakdown of the amount deposited in his or her
bank account.
f) The software calculates the amounts to be deducted from employees in respect of the repayment of
staff loans.
g) The financial controller inspects the cash payments journal to confirm that taxation deducted from
employees is promptly paid over to the South African Revenue Services.
h) Background checks are carried out on all prospective skilled workers before they are employed.
I) The financial controller carefully checks all details on the on-screen schedule of electronic wage
payments before “releasing” it to the bank for payment.
j) Warning letters are sent to employees who are persistently late for work. Describe the purpose of
each of the above internal controls a to j
