|
|
 |
|
Fewer employees are paid in cash and increasingly payroll is handled by an external bureau. These changes mean that security can be more easily compromised and lead to payroll fraud.
Payroll records could be set up for employees who have never existed or, more simply, they could be retained for employees who have left. Frauds can involve the cash payment of wages or payments into bank accounts. Other payroll frauds include inflated overtime claims, the use of incorrect hourly rates, overpayment of expenses or underpayment of deductions.
Many payroll systems are computerised - this can provide an advantage as well as a weakness. The weakness is that, without adequate system security, a new record could be put into the system which will then generate payments automatically. The advantage is that, when programmed correctly, the computer can identify anomalies such as employees with the same name, payments to the same bank account, unusually high overtime payments, or the use of emergency tax codes, for example.
Unless these frauds are carried out on an extensive basis, they may escape detection without adquate controls. These controls are described in detail in the Risks section of this website.
|
|
