Hrm And Payroll Cycle

1999 Words8 Pages

Human Resources Management and Payroll Cycle
The Human Resources Management (HRM) and the Payroll Cycle, which represent two connected but autonomous subsystems, are one of the five core transaction cycles inherent in every organisation. According to Romney and Steinbart (2015, p.443) they can be defined as “a recurring set of business activities and related data processing operations associated with effectively managing the employee workforce”. In this process the HRM system conducts all tasks which can be grouped into recruiting, training, job assignment, performance evaluation and discharge of employees. The major activities of the payroll system concern compensation as well as allocation of personnel cost to products and departments. Since …show more content…

First, an increase of the workforce implies that the new employees must be trained to maintain the established security-aware culture. Secondly, an expansion as well as a stock exchange introduction will lead to new roles and tasks that have to be integrated in the organisational structure and might create a lack of clarity concerning accountability and responsibility. Finally, the firm would be subject to even more sophisticated laws and regulations as for instance the Sarbanes-Oxley Act (SOX) for the US stock market, due to its Initial Public Offering (IPO) (Romney & Steinbart, 2015).
The previously outlined aspects build the foundation for the crucial management questions of how the substantial company-specific risks can be identified and also how suitable control mechanisms can be determined and implemented. To solve this issue and to introduce an effective as well as reliable control system is the requirement for the applied framework. Keeping this in mind the two most common frameworks, namely COSO and COBIT are presented and their applicability is discussed.
Committee of Sponsoring Organizations (COSO) …show more content…

It emphasises the enterprise-wider management of threats and also the risks resulting from the market environment. Moreover, it reveals the relevance of employees as a key influencing factor of a reliable control system (Romney & Steinbart, 2015). Therefore, the evaluation is based on the COSO ERM framework.
Control Objectives for Information and Related Technology (COBIT) framework
The second approach to implement an internal control system is the Control Objectives for Information and Related Technology (COBIT) framework. It was introduced in 1996 by the Information Systems Audit and Control Association (ISACA) with a clear focus on IT-related issues concerning governance and management (Romney & Steinbart, 2015). Similar to COSO it is constantly evolving and broadens its view to provide more comprehensive guidelines as outlined in Figure 3. The current COBIT 5 version is not only widening the perspective, but also enables the integration of related models such as Val IT and Risk IT into the framework, thereby reinforcing the effectiveness and reliability of the concept (ISACA, 2006). Furthermore, COBIT 5 shifts the focus even further on a company-wide level and fosters the reconciliation of the IT landscape with the business needs and stakeholder requirements (Zororo, 2015). As a consequence, the following discussion always refers to the COBIT 5

Open Document