CPP CPP Industry Standards 2 — Questions and Answers
Question 1: According to the APA's best practices, what is the recommended maximum number of days after a pay period ends that employers should issue paychecks?
- 3 days
- 5 days (Correct answer)
- 7 days
- 10 days
Correct answer: 5 days
The APA recommends paychecks be issued within 5 business days after the pay period ends as a best practice standard.
Question 2: Which industry standard body publishes the 'Guide to Global Payroll Management' used by CPP candidates and practitioners?
- SHRM
- APA (Correct answer)
- IRS
- NASBA
Correct answer: APA
The American Payroll Association (APA) publishes the Guide to Global Payroll Management, a key reference for international payroll standards.
Question 3: Under the FLSA record-keeping standard, how long must employers retain payroll records for non-exempt employees?
- 1 year
- 2 years
- 3 years (Correct answer)
- 7 years
Correct answer: 3 years
The FLSA requires payroll records for non-exempt employees to be retained for a minimum of 3 years.
Question 4: Which payroll industry standard addresses the secure transmission of ACH direct deposit files between employers and financial institutions?
- NACHA Operating Rules (Correct answer)
- FLSA Section 7
- IRS Rev. Proc. 2001-11
- SOX Section 302
Correct answer: NACHA Operating Rules
NACHA Operating Rules govern the secure transmission, formatting, and processing of ACH files including direct deposit transactions.
Question 5: The APA's PayrollOrg Code of Ethics requires CPP holders to handle confidential payroll data with what primary obligation?
- Transparency to all stakeholders
- Confidentiality and discretion (Correct answer)
- Full public disclosure
- Immediate regulatory reporting
Correct answer: Confidentiality and discretion
The APA Code of Ethics obligates CPP holders to maintain confidentiality and exercise discretion when handling sensitive payroll and employee data.
Question 6: In payroll industry practice, what does the term 'parallel processing' refer to during a system conversion?
- Running two payroll cycles simultaneously for comparison (Correct answer)
- Processing payroll for two departments at once
- Splitting payroll between two vendors
- Running live and test environments on separate servers
Correct answer: Running two payroll cycles simultaneously for comparison
Parallel processing means running the old and new payroll systems simultaneously for the same pay period to compare results before full cutover.
Question 7: Which standard requires payroll departments to maintain a documented disaster recovery plan for payroll continuity?
- GAAP
- SOX Section 404
- APA Best Practices (Correct answer)
- ERISA Section 3
Correct answer: APA Best Practices
The APA Best Practices guidelines recommend that payroll departments maintain documented disaster recovery and business continuity plans.
CPP CPP Industry Standards 2
According to the APA's best practices, what is the recommended maximum number of days after a pay period ends that employers should issue paychecks?