1) Which two of the following control activities will reduce the risk of employees who have left
being made up a pay packet which is collected by the leaver or an accomplice
A. Check that each employee only collects one packet
B. Supervision of payout by member of staff who knows all the employees personally
C. Authorisation of payroll
D. Comparision of payroll with wage packets to ensure they watch
2) Which three of the following control activities will reduce the risk of employees are not paid?
Segregation of duties
1.
2.
3.
4.
Preparing the payroll net pay
Distribution of wages
Filling of pay packets
Storekeeper
A. (1), (2), (3)
B. (2), (3), (4)
C. (1), (2), (4)
D. (1), (2), (3), (4)
3) MU, which is a employee of Old Trafford plc, signed a contract from 1/1/X1 to 1/10/X1.
However, after MU quits the job, OT company still pays for the last 2 months of X1 .
What is the risk of this situation?
A.
B.
C.
D.
people who are not employees are paid
People who are employees are not paid
The company may pay employees too much money
Amounts paid to employees might not be reflected in the cash books
4) Which control helps prevent payments to employees who have left the company?
A. Recording working hours through time sheets
B. Maintaining personnel records and regular reviews
C. Automatic annual salary increases
D. No need for payroll approval
Answer: B
5) What is a key risk in calculating wages and salaries?
A. Employees do not receive their salaries
B. The company pays employees too much money
C. No changes are made to the payroll system
D. All deductions are processed automatically
Answer: B
Question bank
6) Which two of the following activities will reduce the risk that the different elements of pay might not
be recorded correctly in the payroll?
A.
B.
C.
D.
One for one checking o payroll details back to independently maintained personnel records
Segregation of duties throughout the payroll department
Reconcilation of total pay and deductions between one pay day and the next
Encryption of data
7) For each of the following statements about internal controls over payroll, select whether they are
true or false
The payroll should be checked back to individual employee personnel records on a regular basis.
A. True
B. False
Leavers and joiners should be authorized by senior member of staff.
C. True
D. False
Reperformance of calculations is necessary where the payroll system is computerized
E. True
F. False
8) Deficeincies have been identified in the following areas of a company’s wages system.
For each deficiency, select the risk which is most likely to arise
No central records are kept of changes in personnel and pay rates.
A. Pay might not be recorded correctly in the general ledger
B. The company may pay employees who have left
There are no procedures for dealing with non- routiin matters.
C. Pay might not be recorded correctly in the general ledger
D. The company may pay employees who have left
There is no segregation of duties between the preparation and the authorization of the payroll
E. Pay might not be recorded correctly in the general ledger
F. The com pant may pay employees who have left