Payroll Systems and Technology Flashcards

A company receives a positive pay file rejection from its bank. What does this most likely indicate?

Answer: The check number or amount in the payroll file does not match the bank's records

Positive pay is a bank fraud-prevention service; a rejection means the check presented for payment has a number or dollar amount that doesn't match the file transmitted by the company.

What is the purpose of a Business Continuity Plan (BCP) specifically for payroll operations?

Answer: To ensure payroll can continue to be processed during a system outage or disaster

A payroll BCP outlines procedures, backup systems, and alternate methods to ensure employees are paid on time even during a system failure, natural disaster, or other disruption.

Which type of software integration uses real-time data exchange between payroll and time-tracking systems?

Answer: API-based real-time integration

API-based real-time integration allows payroll and time-tracking systems to exchange data instantly, ensuring that approved time is immediately reflected in the payroll system.

Under SOX compliance, which payroll system control is required to ensure financial statement accuracy?

Answer: Documented access controls and audit trails for payroll changes

SOX (Sarbanes-Oxley Act) requires public companies to maintain documented internal controls, including access restrictions and audit trails for any payroll system changes that affect financial statements.

What is the primary function of a payroll 'audit log' or 'change log'?

Answer: To record a timestamped history of all system changes and who made them

An audit log records every change made in the payroll system—including who made it, when, and what was changed—providing an accountable trail for compliance and fraud prevention.

When a payroll system vendor announces end-of-life (EOL) for a product, what is the MOST critical risk for a company that does not upgrade?

Answer: The system will no longer receive security patches or compliance updates

After EOL, vendors stop releasing security patches and tax/compliance updates, leaving the company exposed to security vulnerabilities and the risk of processing payroll with outdated tax tables.

A payroll system uses role-based access control (RBAC). What does this mean?

Answer: System permissions are assigned based on an employee's job function and responsibilities

RBAC restricts system access so that users only have permissions appropriate to their job role—for example, a payroll clerk can enter time data but cannot approve payroll runs.