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ment s workload, its required level of expertise in operating computer software, and in the risk that payroll taxes will not be remitted to the government in a timely manner For these and other reasons, outsourcing payroll is an extremely popular option, especially for smaller businesses that do not have in-house payroll expertise on hand This subject is covered in much more detail in 15, Outsourcing Payroll The basic process flow for an outsourced payroll function is shown in Exhibit 11 The key items in the exhibit are the tasks that are not shown because they have been taken over by the payroll supplier These tasks include processing the payroll transactions, printing payroll reports and paychecks, and making tax deposits and reports to the government on behalf of the company By removing these activities, the payroll staff is reduced to compiling and verifying incoming data about hours worked, loading it into the supplier s payroll system, and verifying that the results are accurate The process tasks noted in Exhibit 11 can be streamlined by taking several additional steps First, use a computerized timekeeping system that will prevent unauthorized overtime and automatically issue reports that highlight hours that were not logged in by employees, thereby eliminating two steps from the data collection part of the process Second, some payroll suppliers sell computerized timekeeping systems that link directly into their systems, so there is no need to manually load this information into the supplier s system (or call it in to a dataentry person) Third, a company can pay the supplier to create customized summary-level reports that can be used as the foundation for journal entries, which eliminates additional work Finally, some suppliers now issue payroll reports on compact disc, which nearly eliminates the filing chore By taking advantage of these additional outsourcing features, the payroll process can become a very efficient system Controls over the outsourced payroll process are fewer than required for other systems because there is no need to control the check stock or signature plates, which are handled by the supplier Consequently, the primary controls tend to be at the beginning and end of the process As shown in Exhibit 12, there should be an approval process for overtime hours worked, as well as for negative deductions; a negative deduction is essentially a payment to an employee, and if used repeatedly, even incrementally small amounts could add up to a significant pay increase for an employee For larger companies with many employees, one should also compare the addresses on the employee paychecks to see if a fake employee has been added to the system, with the check being mailed to a current employee s address to be cashed by that person One can also issue a list of people receiving paychecks to the department supervisors to see if any fake names or the names of departed employees crop up Finally, fake employees can also be spotted by handing out checks directly to employees and having them show some form of identification before they receive their checks Though not all of these controls are necessary, one should select those that make the most sense for a company s specific circumstances.

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The authors in [52] propose a different approach for securing routing in ad hoc networks The key concept of the security-aware ad hoc routing (SAR) protocol is that, for applications that require security, it is preferable to route packets through trusted nodes rather than route the packets through the shortest path that may include untrusted nodes SAR assumes that there is a trust hierarchy Nodes lower in the hierarchy may be trusted less while nodes higher in the hierarchy may be trusted more Trust may be derived for example through the organizational structure In a military environment, nodes belonging to generals may be more trusted (since they are typically well protected) than sensor nodes out in enemy territory The approach is quite general and can be applied to several routing protocols, although the authors explain this in the context of AODV In order to support routing messages

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Creating a Payroll System / 7

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