Week 4 Writing Project Presentation

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California Crunch Company Result Analysis

Valery Salazar

Keiser University

Auditing 1

Dr. Jennifer Bolden

March 25, 2023

Results Analysis and Internal Controls Recommendation

Introduction

Comparing the Three Gross Pay Payment Periods for Employee ID 217, The investigation concluded that the payment was legitimate since the employer accurately reflected the employee's pay rate and working hours on the pay stub. Yet, it is clear that the identical payroll checks as specified on the payroll slip were issued after reviewing the identical payroll checks, tax, or deductions (Conroy et al. 2022). For example, on November 2, 2018, the assumption was 0.2163 for the base pay rate of $23.91, and the reduction was 0.3199 for the base pay rate of $24.90 on the same day. Dates 14 December 2018 are another example, with pay rates of 23.91 and 24.90, respectively, using presumptions of 0.2163 and 0.3199. As just one worker is represented in the pay stub, the analysis table contains no information on former workers who were let go. Employment ID 217's gross compensation is correct. The paycheck is proof of employment by detailing the employee's wages, deductions, and hours worked. The employee has proof that identical computations and deductions were made from both payroll checks. For instance, on November 2, 2018, 0.2163 was subtracted from the 23.91 hourly rates and 0.3199 from the 24.90 hourly rates. On the same day in 2018, deductions of 0.2163 were taken from the 23.91 hourly rates, and 0.3199 were taken from the 24.90 hourly rates. This investigation proves the gross salary associated with employee ID 217 is correct. As just one worker is shown on the pay stub, the analysis also confirms that there were no layoffs. This further verifies that the employee's gross salary is accurate. In addition, the pay period and rate shown on the pay stub were adhered to correctly by the employer. This shows that the company has been respectful of the employee's rights and has been meeting its commitments (Bussoli et al., 2023)

A further investigation into the issue of unpaid workers and their deductions was conducted. Workers 212, 333, 396, and 885 don't have any means of support or motivation. There was a lot of redundancy in the payroll system, which made it difficult to manage. An employee with the ID number 212 has been copied five times, and so have the ID numbers 333, 396, and 885. There was also no deception since there was. In the second round of calculations, workers 212, 333, 396, and 885 were found to be missing income and deductions. Research revealed that worker 212 was mentioned five times, whereas the other three were only listed once. Hence, a misunderstanding between the payroll office and the work led to this double payment. Throughout the investigation, further payroll-related concerns surfaced. For instance, due to excessive duplication, the payroll was too high. Some information gathered was also flawed or incomplete; for example, certain employee IDs and related documents were left out. Paychecks and deductions could have been off as a result. The study, fortunately, turned up no signs of fraud. There was a complete and accurate tally of all workers' earnings and deductions. In addition, workers whose paychecks lacked necessary information about income and deductions were not compensated with extra money. Several problems in the payroll section were uncovered during the investigation.

Conclusion and Recommendation.

The examination of the California Crunch Company's owner found that the company lacked adequate internal controls. The company's financial transactions were not being recorded or accounted for by the proprietor. The owner also wasn't keeping a close enough eye on the business's finances to avoid fraud. The owner also lacked internal audits and reviews and had sloppy accounting procedures.

To solve these problems, I suggest the owner set up some internal controls. Establishing a governing body or an independent auditor to oversee financial matters is an important part of this system. The proprietor should also set up methods for monitoring financial activity and conducting internal audits and reviews. The proprietor should also establish measures to identify and prevent fraud, such as a fraud risk assessment program. Lastly, the owner is responsible for ensuring that all accounting procedures are accurate and in line with all relevant legislation. The owner will better handle the company's finances thanks to these newly implemented internal controls.

References

Bussoli, C., Giannotti, C., Marino, F., & Maruotti, A. (2023). Trade credit in Europe: Financial constraint and substitution effect in crisis times.  European Financial Management,  29(1), 327-348. https://onlinelibrary.wiley.com/doi/abs/10.1111/eufm.12362

Conroy, M., Fitzhenry, S., Seiberlich, K., Burke, T., & Nix, N. (2022). Case 7: Case Competition–Alphabet Audit.  Comprehensive Analysis of Financial Accounting Through Series of Case Studies, 45. https://egrove.olemiss.edu/cgi/viewcontent.cgi?article=3566&context=hon_thesis#page=50