1. Chapter 14 The Human Resources (HR) Management and Payroll Processes
Accounting Information Systems 8e
Ulric J. Gelinas and Richard Dull
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2. Learning Objectives
Define and understand the basic functions of the HR management and payroll processes.
Describe the relationship between the HR management and payroll processes and their environment.
Comprehend the relationship between the HR management and payroll processes and management decision making.
Depict the logical and physical elements of the HR management and payroll processes.
Describe some of the technology used to implement the HR management and payroll processes.
Prepare a control matrix for a typical payroll process, including explanation of how business process control plans can accomplish payroll operations and information control goals.

3. Process Definition and Functions
The human resources management (HRM) process consists of people, equipment, activities, and controls that supports:
repetitive work routines of the HR department.
decision needs of those who manage the HR department.
The HRM process
captures, records, and stores data concerning HR activities.
generates a variety of HR forms and documents.
prepares management and governmental reports.
The payroll process consists of people, equipment, activities, and controls that
support the repetitive work routines of the payroll department.
maintain records containing data for payroll taxes and fringe benefits, attendance reporting, timekeeping, and paying employees.

4. Human Resources Options in Microsoft Dynamics GP

5. Organization Chart of the HR Function

6. Duties of HR Managers

7. Duties of HR Managers (cont’d.)

8. Integration of the HRM and Payroll Processes
Payroll function often automated due to its repetitive, labor intensive nature.
Current HR software can do much more than just payroll.
Because the HR management and payroll processes share so much employee data, the functions must be integrated into an enterprise system.
The HR module includes many options for managing employees, including
creating a single source for obtaining HR information.
providing for faster data access.
minimizing data redundancy.
ensuring data integrity and consistency.
facilitating data maintenance.
improving data accuracy.

9. Technology Trends and Developments
HR self service systems
HR manuals
Helpful hints
Retirement information
Personal profile
Forms and changes
Important links
Outsourcing of payroll and other HR functions
Enterprise systems play a role in implementing required HR and payroll functionality.

10. Options for Maintaining Employee Master Data in Microsoft Dynamics GP

11. HRM Process - Systems Flowchart

12. Implementing the HRM Process
Process Inputs: In general, the HR forms in the systems flowchart capture information about three HR-related events:
(1) selecting employees
(2) evaluating employees, and
(3) terminating employees

13. Implementing the HRM Process
Selecting employees may be initiated in one of two ways:
Departmental managers (outside the HR department) may initiate the process to satisfy their immediate hiring needs.
Selection process may be automatically started by the system.
The candidate selected and hired can come from within or outside of the organization.

14. Implementing the HRM Process
Evaluating employees involves many activities.
Departmental managers and supervisors (outside the HR function) usually initiate evaluations or other changes affecting employees.
The manager of personnel appraisal and development (in HR) typically approves the review and implements changes.

15. Implementing the HRM Process
Terminating employees closes the employment process loop.
Periodically, departmental managers and supervisors (in concert with HR managers) must make difficult decisions about the retention of employees.
If a termination is necessary, the employee change screen is used to initiate the process of changing an employee’s status from current employee to terminated employee.

16. Implementing the HRM Process
Processing Logic and Process Outputs
HR requests initiated outside of the HR department are approved within that department and then routed to HR for approval.
Some data may be entered within HR.
The employee/payroll master data, skills inventory data, and labor-force planning data within the enterprise database are updated and various reports are made available.
Several outputs are produced including
Internal communications
Payroll reports
Reports for governments (i.e. OSHA)

17. Organization Chart Illustrating the Payroll Function

18. Payroll Process Context Diagram

19. Payroll Process: Level 0 DFD

20. Payroll Process – Diagram 4

21. Payroll Accounting Entries

22. Accounting Entries (Cont’d.)

23. Payroll Process Flowchart

24. Payroll Fraud Types of payroll frauds:
Ghost employees (former or non-existent employees who are issued paychecks).
Falsified hours and salary (overstated hours worked or base salary amount).
Commission schemes (overstated sales or commission rates).
False worker’s comp claims (faking injury to receive compensation).

25. Payroll System Controls
Segregation of duties between HR (employee record creation), payroll (prepares payroll) and AP/cashier (disburses cash).
Direct deposit (eliminates opportunity for check fraud).
Review of employee master data for duplicate names and/or social security numbers.
Comparison of actual payroll to budget.

26. Reimbursement Fraud
Reimbursement for employee business expenses often are done through the payroll system. Fraudulent activities include:
Claiming personal expenses as business
Altering receipts to increase expenses
Submitting false receipts
Submitting the same expense multiple times

27. Payroll Process Control Matrix

28. Payroll Process Control Matrix