AUDITING+ASSURANCE 12MONTH ACCESS CARD
17th Edition
ISBN: 9780135635131
Author: ARENS
Publisher: WILEY
expand_more
expand_more
format_list_bulleted
Question
Chapter 20, Problem 16.2MCQ
To determine
Identify which is the best control to prevent and detect fictious payroll transactions.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Control risk is the risk that a material misstatement in an account will not be prevented or detected on a timely basis by the client’s internal controls. The best controlto prevent or detect fictitious payroll transactions is to(1) use and account for prenumbered payroll checks.(2) obtain authorization from human resources for hiring, pay rate, job status andtermination.(3) verify internally authorized pay rates, computations, and agreement with thepayroll register.(4) conduct periodic independent bank reconciliations of the payroll bank account.
What is the purpose of the following control procedures (i.e., what threats is it designed to mitigate)?
h. Encryption of payroll data both when it is electronically sent to a payroll service bureau and while at rest in the HR/payroll database.
Which of the following IT controls would a company appropriately use to mitigate the risk of
unauthorized access to its payroll data? a. Validity checks b. Biometric devices c. A neural network
d. Employee purchase cards
Chapter 20 Solutions
AUDITING+ASSURANCE 12MONTH ACCESS CARD
Ch. 20 - Prob. 1RQCh. 20 - Prob. 2RQCh. 20 - Distinguish among a payroll master file, a W-2...Ch. 20 - Prob. 4RQCh. 20 - Prob. 5RQCh. 20 - Prob. 6RQCh. 20 - Prob. 7RQCh. 20 - Prob. 8RQCh. 20 - Prob. 9RQCh. 20 - Prob. 10RQ
Ch. 20 - Prob. 11RQCh. 20 - Prob. 12RQCh. 20 - Prob. 13RQCh. 20 - Prob. 14RQCh. 20 - Prob. 15RQCh. 20 - Prob. 16.1MCQCh. 20 - Prob. 16.2MCQCh. 20 - Prob. 16.3MCQCh. 20 - Prob. 17.1MCQCh. 20 - Prob. 17.2MCQCh. 20 - Prob. 17.3MCQCh. 20 - Prob. 18.1MCQCh. 20 - Prob. 18.2MCQCh. 20 - Prob. 18.3MCQCh. 20 - Prob. 19DQPCh. 20 - Prob. 20DQPCh. 20 - Prob. 21DQPCh. 20 - Prob. 22DQPCh. 20 - Prob. 23DQPCh. 20 - Prob. 24DQPCh. 20 - Prob. 25DQPCh. 20 - Prob. 26DQPCh. 20 - Prob. 27DQPCh. 20 - Prob. 28C
Knowledge Booster
Similar questions
- In the event of payroll fraud, discuss the suggestion that the human elements of control systems are frequently more important than the software elements in ensuring that records are correct.arrow_forwardWhich preventive, detective, and/or corrective controls would best mitigate the following threat, and why? (b) A salesperson successfully logged into the payroll system by guessing the payroll supervisor’s password.arrow_forwardWhat is the purpose of the following control procedures (i.e., what threats is it designed to mitigate)? i. Establishing a separate payroll checking account and funding it as an imprest account.arrow_forward
- For the purpose of internal control, the same person who prepares payroll checks should also distribute them. True or False True Falsearrow_forwardWhat is NOT an example of internal control procedures that help prevent payroll fraud? a.Outsource Payroll Administration b.Require mandatory vacations c.Make sure only one person handles payroll functions d.Conduct periodic unannounced auditsarrow_forwardRefer to the flowchart.a. What risks are associated with the payroll procedures depicted in the flowchart?b. Discuss two control techniques that will reduce or eliminate the risks.arrow_forward
- What are the most common errors and frauds in the personnel and payroll cycle? Which control characteristics are auditors looking for to prevent or detect these errors and frauds?arrow_forwardIn an automated payroll processing environment, a department manager substituted the time card for a terminated employee with a time card for a fictitious employee. The fictitious employee had the same pay rate and hours worked as the terminated employee. The best control technique to detect this action using employee identification numbers would be aa. batch total.b. record count.c. hash total.d. subsequent check.e. financial total.arrow_forwardPayroll Authorization in a Computerized System. Two accountants were discussing control activities and tests of controls for payroll systems. The senior accountant in charge of the engagement said: “It is impossible to determine who authorizes transactions when the payroll account is computerized.”Required:Evaluate the senior accountant’s statement about control in a computerized payroll system. List the points in the flow of payroll information where authorization takes place.arrow_forward
- An audit client has engaged a third-party service organization tohost its payroll software package on servers located at the service organization. What optionsdo you have to obtain assurance about the controls embedded in the payroll application?arrow_forwardWhich of the following is a preventive control?a. Reconciliation of a bank account.b. Recalculation of a sample of payroll entries by internal auditors.c. Separation of duties between the payroll and personnel departments.d. Detailed fluctuation analysis completed by the CFO for revenue.arrow_forwardWhat is the purpose of the following control procedures (i.e., what threats is it designed to mitigate)? e. Cross-footing the payroll registerarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub
Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning