CPM Payroll Audit & SOX Controls 2

Question 1

Under SOX Section 302, which officer must personally certify that the company's financial disclosures are accurate and that internal controls have been evaluated within 90 days?

Accepted Answer

CEO and CFO

Answer

SOX Section 302 requires the CEO and CFO to personally certify the accuracy of financial reports and the effectiveness of disclosure controls.

Question 2

A payroll auditor discovers that three terminated employees continued to receive paychecks for two months after separation. Which SOX control failure does this most directly represent?

Accepted Answer

Failure of the employee termination notification process and access revocation controls

Answer

Ghost employee payments after termination indicate a breakdown in the termination notification process and the control requiring timely removal from payroll.

Question 3

Which COSO framework component addresses the company's commitment to integrity, ethical values, and competence as it relates to payroll internal controls?

Accepted Answer

Control Environment

Answer

The Control Environment is the COSO component that sets the tone at the top, including management's philosophy, ethical values, and commitment to competence.

Question 4

An organization uses the same employee to both authorize new hires in the HRIS and process the initial payroll setup. This violates which key internal control principle?

Accepted Answer

Segregation of duties

Answer

Segregation of duties requires that no single employee control all phases of a transaction, preventing unauthorized additions to payroll.

Question 5

During a payroll SOX audit, the auditor selects a sample of 25 payroll transactions from a population of 10,000. The sampling method selects every 400th item after a random start. What sampling technique is being used?

Accepted Answer

Systematic sampling

Answer

Systematic sampling selects items at a fixed interval (every nth item) after a random starting point.

(CPM) Certified Payroll Manager Practice Test

(CPM) Certified Payroll Manager Practice Test

CPM Payroll Audit & SOX Controls 2