Which department should have the responsibility for authorizing payroll rate changes?

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Practice Multiple Choice Questions for Payroll, Sales and Collections, Acquisitions and Payment Processes
Which department should be authorized to add and delete employees from the payroll or change pay rates and deductions?
Which controls apply to reducing the threat of unauthorized changes to payroll master file?
What control procedure would be most effective in detecting the failure to prepare a pay checks for a new employee before paychecks are distributed?
What is the principal output of the payroll system?

ACCOUNTING INFORMATION SYSTEMS

CONTROLS AND PROCESSES

TURNER / WEICKGENANNT

CHAPTER 10: Expenditures Processes and Controls – Payroll and Fixed Assets

TEST BANK - CHAPTER 10 - TRUE / FALSE

1. It is not necessary to get specific authorization for each individual routine transaction.

2. Routine transactions refer to common business transactions such as payroll and fixed asset

transactions.

3. Accounting for a fixed asset over the life of the asset would have features of non-routine

transactions only.

4. The payroll process starts when an employee is hired by the organization.

5. Members of management are not required to specifically approve an employee hired by the

company when the new employee has been screened by an employment office.

6. The hiring of employees is considered to be a routine process.

7. A hiring decision normally occurs as the result of an interview or interviews and is documented

on a signed letter and / or signed employment contract.

8. Amounts withheld from an employee paycheck will ultimately be paid to another vendor.

9. Most of the records found in an employee’s personnel file are accounting related.

10. A unique feature of the information contained in an individual personnel file is that it is

accessed infrequently but is changed relatively frequently.

11. It is common that personnel related expenses are one of the largest expenses reported on the

company’s income statement.

12. A challenging area of payroll computation is computing the amount of deductions related to

each employee’s pay.

13. Accounting software is available to assist with payroll but it is not very efficient because of all

the changes that occur to all payroll variables during the period.

14. Preparing payroll manually is extremely time consuming due to the process of extracting all

these inputs from the records and performing the mathematical computations.

15. Overtime hours are paid at a rate different from the regular hours, usually one and one-half

times the standard rate.

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Practice Multiple Choice Questions for Payroll, Sales and Collections, Acquisitions and Payment Processes

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Which department should be authorized to add and delete employees from the payroll or change pay rates and deductions?

Only the human resources department should be authorized to add and delete employees from the payroll or change pay rates and deductions. The appropriate documents and records depend on the nature of the payroll system. Time records are necessary for hourly employees but not for salaried employees.

Which controls apply to reducing the threat of unauthorized changes to payroll master file?

These type of threats which arises due to unauthorized changes in the master payroll can be eliminated by using segregation of duties as an internal control.

What control procedure would be most effective in detecting the failure to prepare a pay checks for a new employee before paychecks are distributed?

Which control procedure would be most effective in detecting the failure to prepare a paycheck for a new employee before paychecks are distributed? (Correct. Batch totals, such as record counts, would identify failure to process all transaction records.)

What is the principal output of the payroll system?

Principal outputs of the payroll system are checks. Employees receive individual paychecks. A payroll check is sent to the bank to transfer funds from the company's regular account to its payroll account.