Suggest ways to improve the Kowal Manufacturing Company's internal controls over hiring and payroll processing

What will be an ideal response?

A system of advice forms should be installed so that new hires, terminations, rate changes, etc., are reported to the payroll department in writing. Such forms should be submitted by the employee and verified by the appropriate supervisor.
1. Before applicants are hired, their backgrounds should be investigated by contacting references to determine that they are honest and have no undesirable personal characteristics.
2. The supply of blank time cards should be removed. At the beginning of each week the payroll department should provide each worker with a time card with his name typed or printed on it.
3. The foreman should collect the time cards at the end of the week, approve them, and turn them over to the payroll clerk. All time cards should be accounted for and any missing cards investigated.
4. The payroll checks should be distributed to the workers by a responsible person other than the foreman. Unclaimed checks should be sent to internal audit until claimed by the worker.
In addition, the following changes should be made because the problem does not state that these procedures are being followed:
• If the Company has a cost system that requires the workers to prepare production reports or to account for their time by work tickets, the time cards and the production reports or work tickets should be compared.
• The payroll checks should be prenumbered to control their issuance.
• A responsible person other than the chief accountant and the payroll clerks should reconcile the payroll bank account.
• From time to time, an officer of the Company should witness a payroll distribution on a surprise basis.