Advanced Forensic Accounting Project: Payroll Records Analysis

This project provides a forensic accounting analysis of Fairmont Legal Services' payroll records. It identifies several key issues, including a lack of segregation of duties in payroll management, a potential conflict of interest with the payroll manager's sister working for the company, the use of a general accounting clerk for payroll reconciliation, and the assignment of payables, receivables, and monthly closing responsibilities to a single accountant. The analysis highlights the importance of proper segregation of duties to prevent fraud and ensure the accuracy of financial records. The project also discusses the use of Tableau for graphical presentation to improve service quality, attract more clients, and enhance the overall payroll system within the organization. Recommendations are made to address the identified anomalies and improve the payroll system, although no specific payroll fraud has been identified.

Running head: ADVANCED FORENSIC ACCOUNTING
Advanced Forensic Accounting
Name of the Student:
Name of the University:
Authors Note:

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Contents
Introduction:....................................................................................................................................2
Issues identified during the forensic audit of payroll records:........................................................2
Lack of segregation in duties in payroll management:................................................................3
Conflict of interest in the payroll department:.............................................................................3
A general accounting clerk has been given responsibility of reconciliation of payroll records:.3
Single accountant is used for payables and receivables functions including monthly closing:. .4
Tableau graphical presentation:.......................................................................................................4
Conclusion:......................................................................................................................................5
References:......................................................................................................................................6

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Introduction:
Providing in-house legal counsel to the clients is the main business operation of Fairmont Legal
Services. Lawyers from the US, Canada, England and Germany are employed by Fairmont to
provide in-house legal services to the clients in these parts of the world. In this document a brief
discussion shall be made on the anomalies identified in the payroll records of the organization
during the forensic audit of payroll records with the objective of improving the payroll records in
the future.
Issues identified during the forensic audit of payroll records:
In order to identify the anomalies in the payroll records of Fairmont Legal Services it is
important to understand how the payroll system works and records are maintained within the
organization. Thus, firstly a brief discussion on the payroll system and records shall held in this
document (Gutsalenko & Kaprava, 2018).
Jenifer Gally is the accounting controller and responsible for the management of payroll master
file. However, the payroll manager is Christine Alexander and in serious case of conflict of
interest is there with her sister Helen Earls residing in Germany working for Fairmont Legal
Services as a lawyer. The payroll manager uses a general accounting clerk, Mary Perez, as an
assistance for payroll accounting instead of a payroll accountant. Mary not only manages the
general ledger but also does all the reconciliations related to payroll. Another general accountant
is there in the accounting department with no payroll functions as she is Carrie Rutten. She is
responsible for accounts payables and receivables including monthly closing. The payroll checks
can only be cut on weekdays and weekend to ensure proper supervision, review and approval
before issuing of payroll checks.

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Taking into consideration the payroll system of the organization and the way the accounting
department works to record transactions related to payroll a list of anomalies have been
identified in the system and the accounting records related to the payroll. A brief discussion on
these anomalies and issues is provided below.
Lack of segregation in duties in payroll management:
Jenifer Gally is the accounting controller and she also manages the payroll master file. It is
important for any organization to segregate duties and responsibilities properly. The person
responsible for the management of payroll master file should be separate from the person who is
the accounting controller. This gives Jennifer Gally huge control over the payroll records with
she is also the accounting controller of the organization it would be much easier for her to
manipulate payroll records without any difficulty ("Reliability and the importance of
maintenance", 2019).
Conflict of interest in the payroll department:
With Christine Alexander being the payroll manager of the organization there is a huge conflict
of interest as her sister Helen Earls is an employee of Fairmont Legal Services working in
Germany for the organization. Considering the influence of a payroll manager on the payroll
records and her power this is a serious case of conflict of interest.
A general accounting clerk has been given responsibility of reconciliation of payroll
records:
Considering the significance and importance of payroll reconciliation and the complexity of such
reconciliation it is always important to have an expert such as payroll accountant in the
accounting department to carry out payroll reconciliation. However, Fairmont Legal Services has

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Mary Perez, a general accountant to manage general ledger and carry out payroll reconciliations
(Yaremenko, 2020).
Single accountant is used for payables and receivables functions including monthly closing:
An individual accountant is given the responsibility of managing accounts payables, accounts
receivables including disbursement and collections along with monthly closing is a serious
anomaly. In fact this could result in serious fraud in the future if immediate action is not taken to
segregate the duties between different accountants in this area instead of giving the entire
responsibility of management of accounts payables, accounts receivables and monthly closing to
a single accountant (GarcÃa-Giménez & Pallardó, 2019).
Tableau graphical presentation:
Tableau graphic presentation is to provide a graphical representation of the actual system built
within and outside the organization to improve the quality of services provided to the clients to
attract more clients in the future. The following graphic taken from the official website of
Tableau.

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Conclusion:
Taking into consideration the discussion from the above it is clear that there have been number
of issues in payroll system of the organization however, no specific issue is yet to be identified in
payroll records. In fact there is no complaint also regarding any such issues in payroll records.
However, immediate steps must be taken to improve the payroll system within the organization.

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References:
GarcÃa-Giménez, J., & Pallardó, F. (2019). Maintenance of glutathione levels and its
importance in epigenetic regulation. Frontiers In Pharmacology, 7(7), 12-71. doi:
10.3389/fphar.2014.00088
Gutsalenko, L., & Kaprava, O. (2018). PAYROLL ACCOUNTING: PROBLEMS AND
IMPROVEMENT DIRECTIONS. Economy And Society, 21(18), 03-12. doi:
10.32782/2524-0072/2018-18-124
Reliability and the importance of maintenance. (2019). Microelectronics Reliability, 15(7), 17.
doi: 10.1016/0026-2714(71)90694-9
Yaremenko, L. (2020). THE MECHANISM FORMATION OF A PAYROLL FUND AND THE
DIRECTIONS OF ITS IMPROVEMENT. Agrosvit, 2(2), 53. doi: 10.32702/2306-
6792.2020.2.53