Online Safety Community

Understanding payroll fraud and preventing it

Payroll fraud is a matter of serious concern to the people affected by it, the organization in which it happens, and to the economy overall. It is estimated that payroll fraud is involved in around an eighth of all workplace frauds and makes up about a twelfth of all occupational frauds worldwide. On average, a payroll fraud case results in loss of $ 48,000 and avoids detection for about three years. Each payroll case fraud costs around $ 72,000.

It is rather unfortunate, but expected that small organizations bear the brunt of payroll frauds. The reason for this is not far to seek: They usually lack the requisite fraud detection mechanisms, making them particularly susceptible to payroll fraud.

Common methods for preventing payroll fraud

Many organizations take a few steps to prevent payroll fraud. Some of these include limiting access to the information relating to payroll, engaging different people for different levels and areas of payroll functions so that it acts as some kind of checks and balances system, conducting thorough background checks of the employees in charge of payroll functions, checking ghost employee accounts, installing automated clearing house (ACH) filters, and a few others.

Section 404 of SOX Act

Additionally, the Sarbanes Oxley Act, which was a landmark legislation aimed at putting checks on large corporate frauds, also requires companies to take a few steps to prevent payroll fraud. Section 404 of the SOX Act requires a few stringent steps:

  • Companies have to include an Internal Control Report in their annual financial reports stating that the management takes responsibility for implementing what SOX terms an “adequate” internal control structure
  • Management has to assess the effectiveness of this internal control structure
  • Deficiencies and discrepancies in these controls must be reported 
  • These declarations by the management have to be attested by external registered auditors.

A complete discussion of the ways of preventing payroll fraud

A thorough understanding of all the elements of payroll fraud and the ways of preventing them will be discussed at a webinar that is being organized by TrainHR, a leading provider of professional trainings for the human resources industry. At this webinar, Dayna Reum, who is Payroll Tax Manager at PetSmart Inc. and has been heavily involved in the payroll field over 15 years; will be the speaker.

To get an in-depth idea of payroll fraud and to understand the ways of dealing with it, please register for this webinar by visiting TrainHR

Tools for detecting payroll fraud

The purpose of this session is to help participants gain an understanding of the legal rules around detecting and deferring payroll fraud. Dayna will review tools that companies can use to detect or deter fraud with immediate effect. She will take up Section 404 of the SOX Act for detailed discussion and examine the requirements in it that publicly traded companies have to meet. She will also explain how the provisions of the Act are designed to check payroll fraud.

This webinar will be of high value to professionals involved in payroll functions, such as Payroll Professionals, Compensation Professionals, HR Professionals, and Benefit Professionals. In the course of this webinar, Dayna will cover the following areas:

  • Payroll Fraud Statistic's-How big of a problem is it?
  • How does payroll fraud occur?
  • Preventing Payroll Fraud
  • Internal Controls
  • Tools (Process Maps, Business Continuity Plans, Process Documentation)
  • Audits
  • Sarbanes-Oxley 404 Requirements
  • Ethical Business Practices.

Views: 13

Comment

You need to be a member of Online Safety Community to add comments!

Join Online Safety Community

Take our poll!

Take our poll!

Latest Activity

kate smith posted a blog post

Documentation of Employee Discussions is all Important

As with law, the dictum for management is this: What is not documented does not exist. One can look back at the age-old Latin adage to this effect -Verba Volant, Scripta Manent, meaning “what is said flies, what is written stays”. This just about summarizes the need for documentation in organizations.Documentation is at the heart of organizations, because when employees take an organization to court for some strong reason such as termination -and there is no dearth of such lawsuits…See More
yesterday
rodriguezcecelia posted blog posts
yesterday
John Robinson posted blog posts
yesterday
Adam Fleaming posted blog posts
yesterday

Forum

Differences between Sap devoloper and Sap technical consultant.?

What are the main Differences between Sap devoloper and Sap technical consultant.?Continue

Tags: training, differences, sap

Started by emmablisa Sep 6.

Black Belt Training Course in Reno

Welcome to MSys Training! We thank you for visiting MSys LSSBB training page. Attend our 4 days Lean Six Sigma Black Belt (LSSBB) training program with 100% pass rate, high quality course material,…Continue

Tags: sigma, six

Started by rodriguezcecelia Aug 25.

QlikView 12.10 Service Release 8 and QlikView Governance Dashboard 2.0.4 now available

Hello all,Qlik announced that QlikView 12.10 Service Release 8 [SR8] is now available on Qlik download site.   SR8 is a…Continue

Started by Madison Quinn Aug 22.

PMP Certification Boot Camp Los Angeles

Welcome to MSys Training, North America’s leading training provider. Read some of our reviews on www.trustpilot.com. MSys’ PMP® program…Continue

Tags: PMP

Started by rodriguezcecelia Aug 22.

Safety - A Prerequisite 11 Replies

Whether working at home or outside, to observe safety should be our pre-requisite. The employer before anything must be sure of the safety of its employees especially the ones working in mines or any…Continue

Tags: products, safety

Started by Enna Henry. Last reply by Tara safe Aug 16.

Badge

Loading…

© 2017   Created by Safety Community.   Powered by

Badges  |  Report an Issue  |  Terms of Service