Topic 7 - Human Resources & Payroll Cycle

Question 0

What are the payroll cycle activities?

Answer 0

1. Update payroll master data
2. Validate time and attendance data (source document: time sheets)
3. Prepare payroll (source document: payroll register and deduction register)
4. Disburse payroll
5. Disburse taxes and miscellaneous deductions

Question 1

What are the steps in the Human Resource Management Process?

Answer 1

1. Recruit and hire new employees
2. Training
3. Job assignment
4. Compensation (payroll)
5. Performance evaluation
6. Discharge of employees (voluntary or involuntary)

Question 2

What are the threats in updating the master payroll data?

Answer 2

1. Unauthorized changes to payroll master data

2. Inaccurate updating of master data

Question 3

What are the controls for unauthorized changes to payroll master data (master payroll data)?

Answer 3

1. Access controls and segregation of duties

Question 4

What are the controls for inaccurate updating of master data (master payroll data)?

Answer 4

1. Data processing integrity controls

Question 5

What are the threats for validating time and attendance data?

Answer 5

1. Inaccurate time and attendance data

Question 6

What are the controls for inaccurate time and attendance data (time and attendance data)?

Answer 6

1. Supervisory review

2. Source data automation for data capture

Question 7

What are the threats for preparing payroll?

Answer 7

1. Errors in processing payroll

Question 8

What are the controls for errors in processing payroll (payroll)?

Answer 8

1. Data processing integrity controls

2. Supervisory review

Question 9

What are the threats for disbursing payroll and payroll taxes?

Answer 9

1. Theft or fraudulent distribution of paychecks
2. Failure to make required payments
3. Untimely payments
4. Inaccurate payments

Question 10

What are the controls for theft or fraudulent distribution of paychecks (disburse payroll)?

Answer 10

1. Restrict access to blank payroll checks and check signing machine
2. Use separate account (imprest fund)

Question 11

What are the controls for failure to make required payments (disburse payroll)?

Answer 11

1. Configure system to make automatic payments on time.

Question 12

What are the controls for untimely payments (disburse payroll)?

Answer 12

1. Configure system to make automatic payments on time.

Question 13

What are the controls for inaccurate payments (disburse payroll)?

Answer 13

1. Process integrity controls

2. Supervisory review

Question 14

What are reasons to outsource payroll?

Answer 14

1. Reduce costs (cost of processing and minimize errors)
2. Broader range of benefits (administration of benefits)
3. Free up computer resources

Question 15

What is the zero check balance?

Answer 15

the payroll clearing account shows a zero balance once all entries are posted

Question 16

What is a time card?

Answer 16

A document that records the employee’s arrival and departure times for each work shift.

Question 17

What is a time sheet?

Answer 17

A data entry screen (or paper document) used by salaried professionals to record how much time was spent performing various tasks for specific clients.

Question 18

What is a payroll register?

Answer 18

A listing of payroll data for each employee for a payroll period.

Question 19

What is a deduction register?

Answer 19

A report listing the miscellaneous voluntary deductions for each employee.

Question 20

What is the earnings statement?

Answer 20

A report listing the amount of gross pay, deductions, and net pay for the current period and the year-to-date totals for each category.

Question 21

What is a payroll clearing account?

Answer 21

A general ledger account used to check the accuracy and completeness of recording payroll costs and their subsequent allocation to appropriate cost centers.

Question 22

What is the payroll service bureau?

Answer 22

An organization that maintains the payroll master file for each of its clients and performs their payroll processing activities for a fee.

Question 23

Which department should have responsibility for authorizing pay-rate changes?

Answer 23

Human Resources Management (HRM) because they have no other role in the payroll process.

Question 24

To maximize effectiveness of internal controls over payroll, which of the following persons should be responsible for distributing employee paychecks?

Answer 24

departmental secretary since they have no other payroll duties so they cannot conceal theft of paychecks.

Question 25

Where should unclaimed paychecks be returned?

Answer 25

cashier

Question 26

Online processing is most useful for what payroll task?

Answer 26

making changes in employee benefit choices