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Payroll CPP Prep 2021 > Systems > Flashcards

Systems Flashcards

1
Q

Benefits of TIN Matching

A
  • Match W-9 name and TIN with IRS records.
  • Decrease backup withholding and penalty notices.
  • Reduce the error rate in TIN validation
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2
Q

Define batch processing

A

Data is entered in batches. The batches are then processed in the system and after the batches are processed the updated records can be viewed in the system.

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3
Q

Define parallel testing.

A

Using actual payroll inputs to run a full payroll end-to-end on a new system and comparing the results to the live payroll

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4
Q

Define RDFI

A

Receiving Depository Financial Institution - The employee’s bank

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5
Q

Define SaaS

A

“Software-as-a-service” Software and associated data is hosted centrally by vendor and accessed by customers over the internet.

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6
Q

Define Unit testing

A

Testing individual components of a new payroll system.

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7
Q

Defining the objects of your project is part of what phase of system selection?

A

Performing a needs analysis.

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8
Q

Definition of “authorized payor” for TIN matching.

A
  • Has filed information returns in at least one of the past two years.
  • Is listed in the Payer Account File (PAF) database
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9
Q

Developing training materials is part of what phase of system implementation?

A

Configuration

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10
Q

Documenting your current system is part of what phase of system selection?

A

Performing a needs analysis.

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11
Q

During what timeframe can you request a direct deposit “recall”?

A

After the bank sends your file to the ACH network but before deposits post to employee accounts.

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12
Q

During what timeframe would you request a “reversal” of a direct deposit?

A
  • Within 5 business days
  • After the deposit posts to the employee’s account.
  • RDFI normally posts deposits to employee accounts on payday.
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13
Q

Employment tax records must be retained for how long?

A

4 years after the tax becomes due or is paid, whichever is later.

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14
Q

Higher hardware costs is a disadvantage of what type(s) of payroll systems?

A

In-House

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15
Q

How can management discover that internal control procedures are being circumvented?

A

Rotate payroll staff job responsibilities.

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16
Q

How can you tell the difference between an ITIN and an SSN?

A

An ITIN begins with a 9 and has either 7 or an 8 as the fourth digit.

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17
Q

How long must an employer retain an ACH authorization?

A

Latter of 2 years after revoked or 2 years after termination.

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18
Q

How long must you keep I-9 forms?

A

3 years after date of hire or 1 year after date of termination, whichever is longer.

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19
Q

How long must you retain FLSA records?

A

Some records must be maintained 3 years after last date of entry while others must be kept 3 years from the last day in effect.

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20
Q

How long must you retain OSHA records?

A

5 years

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21
Q

How many years must you retain FMLA records?

A

3 years from end of leave.

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22
Q

In-House system Disadvantages

A
  • Initial Investment
  • Level of fixed costs
  • System Maintenance
  • Hardware costs
  • special facility requirements for hardware
  • staffing requirements
  • involvement required to complete Software updates.
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23
Q

In the direct deposit process, what is your company’s bank called?

A

ODFI, Originating Depository Financial Institution

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24
Q

Is prenotification of new direct deposit setups required?

A

No

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25
Q

Length of time a BSO password is good for.

A

90 days

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26
Q

List 3 reasons why a company must have internal controls.

A
  • Prevent material errors and fraud from occurring
  • Ensure compliance with statutory laws and regulations
  • Preserve the integrity of the company’s financial statements
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27
Q

List disruptions that a BCP should address

A
  • Premises
  • People
  • Systems
  • Documentation
  • Data
  • Equipment
  • Telecommunications
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28
Q

Live processing on the new system begins during what phase of a system implementation?

A

Rollout

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29
Q

Lower initial investment is an advantage of what type(s) of payroll systems?

A

Time-shared

Service bureau

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30
Q

Maximum number of user ids an individual may have for BSO.

A

One

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31
Q

Name five different types of payroll systems.

A
  • In-house
  • Time-shared
  • Service bureau
  • Outsourced
  • SaaS (cloud-based)
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32
Q

Name 2 types of Agile Methodology.

A

Scrum and Kanban

33
Q

Ordering hardware is part of what phase of system implementation?

A

Requirements gathering and analysis.

34
Q

Other names for SaaS

A
  • Cloud Computing
  • Hosted software
  • Web-based software
  • On-demand software
35
Q

Outsourcing Advantages

A
  • Level of fixed costs
  • System Maintenance
  • Hardware costs
  • Special facility requirements for hardware
  • Staffing requirements
  • Expandability
  • Involvement required to complete Software updates
36
Q

Outsourcing Disadvantages

A
  • Initial Investment
  • No access to real-time data
  • Lack of control over system software and hardware
  • Software not designed for companies specific needs
37
Q

Party to whom employer sends EFT transactions

A

ODFI

38
Q

Party to whom ODFI sends EFT transactions.

A

ACH Operator

39
Q

Party who posts EFT transactions to customer accounts

A

RDFI

40
Q

Planning and organizing is part of what phase of system implementation?

A

Project initiation

41
Q

Populating the database is part of what phase of system implementation?

A

Configuration

42
Q

Programming customizations is part of what phase of system implementation?

A

Configuration

43
Q

Qualifications for Certified Professional Employer Organization certification application.

A
  • Online application for each responsible individual
  • $1k user fee per applicant
  • Surety letter
  • Copy of audited financials with CPA opinion
  • Positive working capital
  • Uses accrual accounting
44
Q

Requirements of CPEO to maintain certification

A
  • Quarterly attestation has withheld and deposited all federal employment taxes
  • Maintain bond
  • Notifies IRS of any material changes to qualifications since applied
45
Q

SaaS Advantages

A
  • Security
  • Scalability
  • Lower cost of ownership
  • Control & Flexibility
  • Enhancements & fixes updated automatically
  • No IT burden
  • Better data reliability & disaster recover
  • Real-Time access
  • Opportunity to identify and correct errors before checks are produced
46
Q

SaaS Disadvantages

A
  • Lack of control over system software and hardware

- Software not designed for companies specific needs

47
Q

Service Bureau Advantages

A
  • Initial Investment
  • Level of fixed costs
  • System maintenance
  • Hardware costs
  • Special facility requirements for hardware
  • Expandability
  • System Security
  • Involvement required to complete Software updates
48
Q

Service Bureau Disadvantages

A
  • Lack of control over system software and hardware

- Software not designed for companies specific needs

49
Q

Services available in BSO

A
  • Electronic wage reporting (EWR)
  • View File/Wage Report status, errors and error notices
  • View name and SSN errors and error notices for wage files and wage reports submissions of your company
  • SSN verification Service (SSNVS)
  • Form SSA-1694 Request for Business Entity Taxpayer Information
  • Internet Representative Payee Accounting Service
50
Q

System for checking the format of EFW2 file

A

Accuwage

51
Q

Timeshared system Advantages

A
  • Initial Investment
  • Level of fixed costs
  • System maintenance
  • Hardware costs
  • No special facility requirements for hardware
  • Expandability
  • No involvement required to complete Software updates
52
Q

Timeshared system Disadvantages

A
  • System response time
  • no control over system software and hardware
  • software not designed for companies specific needs
  • lack of control over timing of input and late processing when needed
  • system security
53
Q

To whom do you send an RFP?

A

To each vendor you want to present a solution to your project team.

54
Q

Three roles in Scrum

A

Product Owner, Scrum Master and Team Member

55
Q

True or False: An External audit can be relied upon to detect fraud

A

False. The purpose of an external audit is not to detect fraud. However, if fraud is uncovered during an external audit, the auditor has a duty to notify management.

56
Q

Types of meetings in Scrum

A
  • Backlog grooming
  • Sprint planning
  • Daily Scrum
  • Sprint Review
  • Sprint Retrospective
57
Q

Vendor presentations are part of what phase of system selection?

A

Select a system

58
Q

What are the phases of implementing a new payroll system

A
  • project initiation
  • requirements gathering and analysis
  • configuration
  • testing
  • training
  • rollout
59
Q

What are the phases of selecting a new payroll system

A
  • Select a project team
  • perform a needs analysis
  • prepare a request for proposal
  • select a system
60
Q

What does SOX section 404 require

A

That management must assess the effectiveness of internal controls and procedures for financial reporting annually. The company is required to publish a statement in its annual 10-k report regarding the scope and adequacy of the internal controls.

61
Q

What does the acronym BCP mean?

A

Business continuity planning

62
Q

What does the acronym BSO mean?

A

Business Services Online. A service of the SSA

63
Q

What does the acronym SOX mean?

A

Sarbanes-Oxley ACt of 2002

64
Q

What internal control can be used to protect against ghost employees?

A

Conduct surprise physical distribution of paychecks requiring employees to show a photo ID to receive their check.

65
Q

What is a method to prevent collusion between a payroll employee and an employee outside of payroll?

A

Rotate payroll staff job responsibilities.

66
Q

What is an ACH pre-note?

A

A zero dollar deposit sent to test the direct deposit setup for an employee. It is sent before any live deposit.

67
Q

What is considered a quick turnaround time in disaster recovery?

A

4 hours

68
Q

What is the difference between real-time processing and batch processing?

A

In real-time processing updates entered into the system can be viewed immediately. In batch processing updates cannot be viewed until after the batch is processed.

69
Q

What is the federal record retention requirement for employment records?

A

4 years

70
Q

What is the focus of an external audit?

A

For the auditor to express an opinion as to whether the company’s financial statements are free of material misstatements and omissions.

71
Q

What is the maximum number of SSNs you can verify online via SSNVS?

A

10

72
Q

What method can be used in batch processing to catch keying errors or import errors?

A

Batch totals

73
Q

What two categories of testing should be performed during a system implementation?

A

Parallel testing

Unit testing

74
Q

When can you request a “delete” from your ACH file?

A

Before your bank sends your file to the ACH network.

75
Q

Which type(s) of payroll systems gives you the greatest control over timing of input and processing?

A

In-house

76
Q

Who developed Agile Kanban?

A

David J Anderson

77
Q

With what external companies are payroll likely to interface data?

A

Benefit plan administrators

Banks

78
Q

With which other department(s) is payroll likely to interface data?

A
  • Accounts payable
  • Accounting
  • Human Resources
  • Compensation
  • Benefits

Payroll CPP Prep 2021 (11 decks)

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