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

Segregation of duties prevents payroll fraud and error by ensuring no one person controls an entire payroll transaction from setup through approval and payment.

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

ADP's Role-Based Access Control assigns specific permissions to user roles so each individual can only access and perform the payroll functions appropriate to their job responsibility.

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

Ghost employee fraud involves adding fictitious payees or keeping terminated employees active; ADP mitigates this risk through access controls on employee setup and regular system audits.

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

Best practices require reviewing ADP audit trail reports before each payroll run and at least monthly to catch unauthorized changes before they result in incorrect payments.

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

ADP's Audit Trail Report creates a time-stamped log of every change made to the payroll system, recording the user, date, and nature of each modification for compliance and fraud detection.

ADP - ADP Certified Payroll Specialist Practice Test

ADP - ADP Certified Payroll Specialist Practice Test

ADP Payroll Security and Audit