DESCRIPTION OF THE PRACTICAL CASE

PLANNING

An audit assistant prepared the following report in which he

describe the preparation of the payroll for salaries in Hilados y
Tejidos S.A. Out of 600 employees, 100 employees still want to be
cash payments. The remaining 500 must be paid by transfer.
banking. The 20 executives of the company are paid through another system, which

do not enter this area of auditing. A calculation center is used for the
calculation of payroll.

The factory operates eight hours a day and five days a week.
Occasionally, the overtime ended.
The factory manager is responsible for hiring and firing.
factory staff and set salaries. The factory manager maintains a
Card registration for each employee, used to control the number
total number of people used in the different sections of the factory. In addition, the

chips are used when considering promotions and salary increases.

All factory employees are paid based on hours
worked. Control over the time worked is maintained through
a clock system for entry and exit properly supervised.
A different card is used for each employee every week.
Every month there are four or five cards for each employee.
4. Salaries are paid or credited to bank accounts on the last day.
from each month, and covers the period from the 26th of the previous month to the 25th of May

current month.

5. Two employees, A and B, work in the accounting department.

of the company and are responsible for preparation, verification, and payment
of payroll.
6. During the month, A and B prepare the watch cards for everyone
employees of
the company that are paid on a time basis. These tokens are
delivered team at the end of each week or period, and the tokens used
In the previous week or period, they are collected. The collected cards are
maintained by B until the 25th of each month.
7. B collects the watch card information in a summary hour
per month. The information is transferred to the computing center
how the main data to perform payroll calculations.
8. Either A or B notifies the calculation center of any change in personnel.
the salaries before the 25th of each month to allow for the update of
master file.
9. The data center prepares and produces: a) Payroll with details
the tax deductions and Social Security, as well as a spreadsheet of
control of the salaries that they will be paid in cash.
b) Notices of salary transfers to be paid via direct transfer
It is a control spreadsheet for the same. Note: we can assume that the
the internal controls of the data center are reasonable.

10. The transfer notices are signed by the CFO and then,
sent by your department to the ACE banks. The financial director
retain the control sheet.
11. Inform the financial director of the exact amount to be paid in cash, and
the director the financier prepares a bearer check, which he signs
together with the CEO.
12. A and B take the check to the bank and cash it at the counter, receiving the

necessary bills and coins. After checking the amount, A and B put
no transparent envelopes, along with the due date sheets
mentioned in point 9
On the last day of each month, A and B bring the salary envelopes to
the factory goes 6 from department to department paying each
employee in the presence of the respective manager. He gives the money to
employee, while B checks the name of the employee that
appears in the compensations.
14. If there are problems or questions, which is not common, they are
resolved quickly. When some money is missing from an envelope,
what happens very little
Sometimes, it is replenished by removing it from a small box, in possession
of A.
15. The payroll control sheet is then signed by A and B for each
department head.
16. Any envelope not claimed at the time of payment is
returned to the office by B, who immediately prepares a record of
unclaimed salaries. These envelopes are kept locked up
key and in a safe, of which only B and the financial director have one.
Key. Absent employees must go to B to collect their
envelopes. Unclaimed money after a month is inserted into the
bank. When the money is claimed, B notes it in their record of
unclaimed salaries.
17. The company does not have an internal audit department, and the
Above, the comments cover all existing controls.
18. When A and B go on vacation, it is relevant for D, another employee.
of the Department of Accounting.

DEVELOPMENT OF THE PROPOSED PRACTICAL CASE

1. Identify areas of opportunity for Fios e Tecidos S.A.

Propose the establishment of a human resources department.

for efficient control of all employees and the proper use of
human resources
Propose the opening of an Internal Audit Department, and through
can add more knowledge and contribute solidly to the
control in the organization;
Propose the opening of a marketing department for strategies.
of development and leverage of sales volume;
Propose the development of a program to increase effectiveness for
use information technologies (IT);
Propose and implement the development of an order system
online products that are sold at the factory;
 Propose the creation of online stores to reach all audiences;
Propose design strategies aimed at achieving a good
performance in the Production Department;
Develop more effective investment programs to take advantage of
but Production Tools.
Propose the use of the online payment service through the system.
banking;
Propose and implement the cost system for activities in
Production Department (ABC Costs)
Propose the creation of a process manual for each area of the
production process.

2. Provide a proposal for improvement in the internal control process.

Process control consists of three fundamental actions:

planning, maintenance of control levels and improvements. These controls
are directly related to quality management. If we think about
quality management in the process will focus on guidance
of all the actions in the production process focused solely on the customer.
Basic strategies are employed in such focus, such as better organization.
to the process in order to enable the desired outcome throughout the above stages
(CAMPOS, 2004).
Usually, we can notice that most of the average and small
companies do not have fully established procedures, in the same way
that do not have administrative accounting manuals for their
application or with an internal auditing department, so it is necessary
take into consideration the following details.
When analyzing the internal control, it does not have the specifications.
techniques or the appropriate staff for the execution of this work, that is why it is
it is necessary for the establishment of an internal audit department, which will have

the analysis and approval of all transactions carried out internally. From
the same way, it should be taken into account that the department of
production is completely independent of human resources control, due to
it is necessary that, from the process of opening a new
department, Human Resources, with your professional knowledge
It will be developed efficiently and effectively in resource management.
humans from the factory.
Therefore, it will be necessary to analyze and initiate the process of opening the

Marketing department, which would be responsible for creating strategic plans.

for marketing, to increase sales, using information technologies
(TI), as an efficient and online order system, virtual stores, among others.
It will also be necessary to implement and develop a control system.
automated, in all areas, so that at this moment all the
transactions of the referred module can be linked to other modules of a
ERP system, which will ensure greater effectiveness and reliability of records
the transactions throughout the company, as well as Additionally, developments will be made

control tests in the execution of the audit department process

internal.
In the production department, it will be necessary to implement a method of
cost per activities, ABC Method, this will ensure the execution of activities
for each of the employees that is part of the factory production,
same way, develop the corresponding processes and formats
necessary for its correct application, this will help the department of
manufacturing working under a methodology and being more productive. Seeing the
the need to open the marketing department, it is necessary that, in
together with the finance department, give the necessary percentage to the
marketing department, in order to develop your projects such as,
example, online stores and online ordering system.
Regarding the payments department, it will be necessary for the
financial accounting department with the approval of internal audit,
can effect and carry out salary payment transfers for all
collaborators and in the same way not wasting time to distribute it
in envelopes to all employees, this way the process will assist the
The calculation department, as the case says, is more efficient and effective, including the
authorization of the internal auditor.

And as a final procedure, in the internal audit department,

you will have the obligation to prepare the process and control manuals
necessary for your improvement in each of the areas
correspondents, similarly will have to develop audit programs,
with a control approach and a substantive approach, so that
at the time of conducting your audit, you may have the necessary tools
for your verification and compliance while developing a plan
of improvement in each of the areas of the factory and evaluates the performance of the

workers.

2. Establish alternatives for action in case of failure in the process in

general.
For that a company can exercise its activity
withproductivitymaximum, it is necessary that the various stages of the regime
productive and the flow of information occurs in an aligned manner. However, this
it does not occur in practice, as it is common for there to be several failures in

process.
In view of this, to reduce operating costs and increase the
efficiency, it is essential to identify these problems so that they can be
resolved. However, this is not an easy task, as many procedures
Ineffective practices are rooted in the culture of entrepreneurship.

Therefore, it is of fundamental importance that the auditing department

internal plays a very decisive role in that processes and
activities are to be carried out 100% in accordance with the procedures and manuals

of processes to be developed by a subject matter consultant or by the

internal auditor. Similarly, the internal audit department will
prepare action plans regarding risk and organizational prevention.
In each area or department, a plan will be developed.
improvement activities to be able to carry out through the plans all the
scheduled activities in these plans also develop plans for
action so that the effect and the change are observed at the moment of its
application and development.
3. Establish ways of collaboration with other departments to
this type of process.
Establishing forms of collaboration with other departments is a culture.
collaboration is one of the goals of a good part of companies. However, the
The path to this, often, is not very clear. That’s why we listed
some actions that the company can adopt to promote teamwork
team and the cooperation among the employees
1. Provide internal communication channels:
One of the major problems for a low level of collaboration between
professionals is the lack of communication. That's why offering goodCI channelsé
an excellent strategy to encourage cooperation among employees.
One of the channels that most assist in this process is the intranet. The tool is
able to connect departments and teams and facilitate communication of the
employees.
2. Encourage integration:
Integrating collaborators and departments is essential to increase the level of
collaboration within your organization. This is because integration is
fundamental for building a climate ofempathy among employees.
When the different departments of a company work together
integrated, it is much easier for the employees to put themselves in the place of the

others, knowing the difficulties of their peers and helping them to overcome
your challenges.
3. Organize the layout of the workplace.
The workspace is an element that can greatly influence the
cooperation of your team. Therefore, organize the environment in such a way that
favoring collaboration is one of the most efficient strategies in the sense of
encourage assistance among team members. Provide spacious and unobstructed areas.
partitions are one of the ways to arrange the office layout. In this model, the
the level of dialogue tends to grow and interpersonal relationships tend to
narrowing, which contributes greatly to the collaboration happening.
4. Incentive professional development:
One of the ways to foster a culture of collaboration among the
employees are encouraging professional development. Offering lectures,
courses and events are actions that help in the growth of the employee. This
keeps the individual motivated, considering that the
professional progress is one of the main factors for motivation, and the
knowledge acquired by him should be shared with others
members of the organization.

5. Promote gatherings:
Maintaining a good atmosphere among employees is crucial for the level of
collaboration should be high. Therefore, promoting meetings, events, and celebrations
these are some of the ways to create a good relationship between the
professionals. We believe that social gatherings are key to maintaining
a healthy and harmonious environment, which strengthens and promotes work in
team.

BIBLIOGRAPHIC REFERENCES

PALADINI, Edson Pacheco. Quality Management in the Process. São Paulo:

Atlas, 1995.
CAMPOS, Vicente Falconi. TQC: total quality control (in the Japanese style).
8th ed. Minas Gerais: Falconi, 2004.
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