Section: Volume E

Implementing excessive internal controls can reduce staff productivity. When controls are overly complex or numerous, they can create inefficiencies and additional workloads for employees, leading to reduced productivity. Excessive controls can slow down processes, require more time for compliance activities, and divert attention from value-adding tasks, ultimately impacting overall organizational efficiency.
The IIA Standards: Standard 2130 - Governance: "The internal audit activity must assess and make appropriate recommendations to improve the organization's governance processes." COSO Framework: Emphasizes the need for balancing controls to avoid excessive burden on operations while maintaining effective risk management.

An effective control to mitigate the risk of payments to ghost employees involves cross-verification and authorization by relevant departments. Reviewing the staff salary payment list by the head of payroll and its subsequent endorsement by the head of human resources ensures a double-check mechanism that can detect anomalies such as ghost employees. This control measure helps in verifying the legitimacy of the payroll and the accuracy of the payments made.
Best practices in internal controls for payroll and human resources departments

The role of the board in organizational governance most accurately involves the responsibility for the outcome of the process. This encompasses overseeing the strategic direction of the organization, ensuring that corporate objectives are met, and that the management's activities align with the overall strategic vision and risk appetite of the organization. The board's oversight role is crucial in ensuring effective governance and accountability throughout the organization.
The Institute of Internal Auditors (IIA) - International Standards for the Professional Practice of Internal Auditing