This is kind of a poll. I have a question I am hoping to get experienced answers to about how large organizations audit their workforce. I have no specific organization or business in mind, this is a general question on how this is done.
How does a business audit itself (or have an outside audit done) to make sure that a) all the people it thinks are on the payroll actually exist and b) they accurately know and report how much they really get paid. I am assuming there are cases of fraud in the world that make this a good idea. Lets assume that the organization has lots of field offices and people who are paid for different time-periods: full-time 40 hours/week, part-time, seasonal workers, on-call emergency workers, etc. so that taking a reported number o employees and multiplying by an average salary is not useful.
Clearly every large organization has a central payroll and accounting department. So that department can detect many problems-or cause them in the case of correctly paying people ( ). But how does the organization detect problems in the central system? If a clerk in payroll maintains eleven pay accounts for a field office that in fact only has 10 employees? I can imagine situations where the clerk doesn’t even realize there is a problem. She was told to maintain 11 accounts and the field office is half-way around the world, so that is what she does. The fact that the bank account for the 11th person happens to be controlled by the field office manager is not something she can detect.
Are such controls a normal part of any large organization? Is this something a routine annual audit would detect? Is the monitoring an internal function (ie internal auditor) or an external function? Is it done routinely or only when problems are suspected? Is that the reason there are usually payroll departments and human resources departments so that one can check the other?
Any experiences or explanations would be appreciated.