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Payroll Weakness

Rockfield Construction Company, headquartered in Las Vegas, Nevada, built a Apartment Complex in Boulder City. The construction foreman, Slim Pickins, hired the workers for the project. Pickins had his workers fill out the necessary tax forms and sent the employment documents to the home office.
Work on the motel began on May 1 and ended in December. Each Thursday evening, Pickins filled out a time card that listed the hours worked by each employee during the 5-day work week which ended at 5 p.m. on Thursday. Pickins faxed the time sheets to the home office, which prepared the payroll checks on Friday morning. Pickins drove to the home office after lunch on Friday, picked up the payroll checks, and returned to the construction site. At 5 p.m. on Friday, Pickins distributed the paychecks to the workers.

a.Describe in detail the internal control weakness in this situation. b.Specify what negative result could occur because of the internal control weakness.
c.Describe what you would do to correct the internal control weakness.

Solution Preview

Rockfield Construction Company, headquartered in Las Vegas, Nevada, built a Apartment Complex in Boulder City. The construction foreman, Slim Pickins, hired the workers for the project. Pickins had his workers fill out the necessary tax forms and sent the employment documents to the home office.
Work on the motel began on May 1 and ended in December. Each Thursday evening, Pickins filled out a time card that listed the hours worked by each employee during the 5-day work week which ended at 5 p.m. on Thursday. Pickins faxed the time sheets to the home office, which prepared the payroll checks on Friday morning. Pickins drove to the home office after lunch on Friday, picked up the payroll checks, and returned to the ...

Solution Summary

Payroll Weakness is discussed very comprehensively in this explanation. The employment documents to the home office are examined.

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