CPM Payroll Systems and Technology 3 — Questions and Answers
Question 1: An employee self-service (ESS) portal most directly reduces payroll department workload by:
- Automatically calculating overtime premiums
- Allowing employees to update personal data and view pay stubs independently (Correct answer)
- Generating quarterly tax reports
- Flagging uncollected garnishment payments
Correct answer: Allowing employees to update personal data and view pay stubs independently
ESS portals allow employees to update their own contact information, direct deposit details, W-4 elections, and access pay stubs, reducing calls and manual updates handled by payroll staff.
Question 2: What is 'straight-through processing' (STP) in the context of payroll systems?
- Processing all employee types (hourly, salaried, contract) in one payroll run
- Automated end-to-end payroll processing with no manual intervention (Correct answer)
- Running payroll in sequential department order
- Transmitting payroll data directly to the IRS
Correct answer: Automated end-to-end payroll processing with no manual intervention
Straight-through processing (STP) refers to fully automated payroll processing from data input to payment disbursement without requiring manual steps or human intervention.
Question 3: A payroll manager discovers that the system calculated Social Security tax incorrectly for high earners mid-year. What is the FIRST corrective step?
- File an amended Form 941 immediately
- Identify which employees were affected and by how much (Correct answer)
- Issue manual checks to all employees
- Notify the IRS before making any corrections
Correct answer: Identify which employees were affected and by how much
Before any corrective action, the payroll manager must first identify which employees were affected and quantify the error amount to scope the required corrections.
Question 4: Which payroll system feature ensures that an employee's direct deposit cannot be changed without a secondary approval?
- Role-based access control (RBAC)
- Dual approval workflow / segregation of duties control (Correct answer)
- Two-factor authentication at login
- Encrypted data storage
Correct answer: Dual approval workflow / segregation of duties control
A dual approval workflow enforces segregation of duties by requiring a second authorized user to approve sensitive changes like direct deposit routing number updates, preventing fraud.
Question 5: In payroll system terminology, what is an 'interface' between payroll and the general ledger (GL)?
- A report showing net pay by department
- An automated data transfer that posts payroll journal entries to the accounting system (Correct answer)
- The user login screen for the payroll module
- A reconciliation worksheet prepared by the payroll manager
Correct answer: An automated data transfer that posts payroll journal entries to the accounting system
A payroll-to-GL interface is an automated feed that transfers payroll journal entries (wages, taxes, deductions) from the payroll system to the accounting/general ledger system.
Question 6: What does 'scalability' mean when evaluating a payroll system for a rapidly growing company?
- The system's ability to handle increasing employee counts and transaction volumes without performance degradation (Correct answer)
- The ability to export payroll data in multiple file formats
- Support for multiple languages in the employee portal
- The vendor's willingness to negotiate pricing
Correct answer: The system's ability to handle increasing employee counts and transaction volumes without performance degradation
Scalability refers to a payroll system's capacity to accommodate growth in employees, pay groups, and transaction volumes without slowing down or requiring a system replacement.
Question 7: Which regulation requires payroll systems handling electronic health benefit deductions to maintain specific data privacy safeguards?
- FLSA
- HIPAA (Correct answer)
- ERISA
- SOX
Correct answer: HIPAA
HIPAA (Health Insurance Portability and Accountability Act) requires that payroll and HR systems protecting health-related benefit information maintain specific privacy and security safeguards.
CPM Payroll Systems and Technology 3
An employee self-service (ESS) portal most directly reduces payroll department workload by: