ADP Payroll Security and Audit

Question 1

What is the principle of 'segregation of duties' in payroll and why is it important?

Accepted Answer

Dividing payroll tasks among multiple employees so that no single person can both initiate and approve a transaction, reducing the risk of fraud or error

Answer

Assigning all payroll functions to a certified payroll specialist to ensure accuracy

Answer

Separating payroll from HR so each department has independent data access

Answer

Dividing payroll responsibilities between the employer and ADP

Question 2

In ADP, what feature allows administrators to restrict which payroll actions each user can perform?

Accepted Answer

Role-Based Access Control (RBAC) within ADP's security settings

Answer

Employee Self-Service permission groups

Answer

ADP SmartCompliance user hierarchy

Answer

ADP Time & Attendance supervisor codes

Question 3

What is a 'ghost employee' scheme in payroll fraud and how can ADP controls help prevent it?

Accepted Answer

A ghost employee is a fictitious or terminated employee left on the payroll to divert paychecks; ADP prevents this through user access controls, approval workflows, and regular audits of the employee master file

Answer

A ghost employee is an employee whose direct deposit failed and whose check was cashed fraudulently

Answer

Ghost employees are employees misclassified as contractors to avoid payroll taxes

Answer

A ghost employee scheme involves duplicating a real employee's payroll record

Question 4

How often should payroll audit reports be reviewed to detect unauthorized changes in ADP?

Accepted Answer

Each pay period, or at a minimum monthly, and before each payroll is processed

Answer

Annually during the year-end W-2 preparation process

Answer

Only when an employee raises a complaint about their pay

Answer

Quarterly, aligned with Form 941 filing deadlines

Question 5

What is the purpose of ADP's Audit Trail Report?

Accepted Answer

To log all changes made to employee records, pay rates, deductions, and payroll configurations, including who made the change and when

Answer

To summarize total payroll costs by department for budget review

Answer

To list all direct deposit transactions processed in a pay period

Answer

To document employee time and attendance exceptions

Question 6

Which payroll data elements should be treated as highly sensitive and protected under data privacy regulations?

Accepted Answer

Social Security numbers, bank account details, compensation amounts, and tax withholding information

Answer

Employee names and department codes only

Answer

Job titles and hire dates

Answer

PTO balances and performance review scores