My company's accounting department has approached me with a concern regarding the appropriate way to record Payroll for Sox purposes. Currently, about 70% of our employees are paid hourly wages on a weekly basis. This means, typically, that there are a few days at the end of each month where the employee has worked, but the company has not recognized the payroll expense, because we do not create an accrual. My argument is that this is NOT a Sox issue because the amounts that would be accrued are not material. Does anyone have any insight on it's relevance to Sox and whether or not some accounting principle is being broken by the way we are doing things?
I didn't find the right solution from the internet.