3.08 - OPERATING CYCLES: PERSONNEL AND PAYROLL Flashcards
3.08 - OPERATING CYCLES: PERSONNEL AND PAYROLL
Which of the following is a control procedure that most likely could help prevent employee payroll fraud?
A) The personnel department promptly sends employee termination notices to the payroll supervisor.
B) Salary rates resulting from new hires are approved by the payroll supervisor.
C) Employees who distribute payroll checks forward unclaimed payroll checks to the absent employees’
supervisors.
D) Total hours used for determination of gross pay are calculated by the payroll supervisor.
A) The personnel department promptly sends employee termination notices to the payroll supervisor.
Sending employee termination notices to the payroll supervisor promptly can help prevent a supervisor from submitting a payroll check request or time card for a terminated employee.
Sending unclaimed payroll checks to the employees
supervisors would allow the supervisors to request checks for terminated or nonexistent employees.
The employees’ supervisor should approve salary rates for new hires and calculate an employee’s total hours to determine gross pay
3.08 - OPERATING CYCLES: PERSONNEL AND PAYROLL
Which of the following procedures most likely would be considered a weakness in an entity’s internal controls
over payroll?
A) Payroll checks are prepared by the payroll department and signed by the treasurer.
B) The personnel department sends employees’ termination notices to the payroll department.
C) A voucher for the amount of the payroll is prepared in the general accounting department based on the
payroll department’s payroll summary.
D) The employee who distributes payroll checks returns unclaimed payroll checks to the payroll department.
D) The employee who distributes payroll checks returns unclaimed payroll checks to the payroll department.
Since the payroll department has a recording responsibility, unclaimed paychecks should not be returned to that department in order to segregate the duties of recording payroll and custody of the related assets. The treasurer should maintain
unclaimed paychecks.
