OCPS OCPS Payroll Auditing & Internal Controls 2

Question 1

Which of the following is a key indicator of potential payroll fraud detected during an audit?

Accepted Answer

Employees with no listed address or multiple employees sharing a bank account

Answer

Employees with no listed address or multiple employees sharing the same bank account are red flags that may indicate ghost employee or fraudulent payroll schemes.

Question 2

What is the role of an audit trail in payroll systems?

Accepted Answer

To provide a chronological record of all changes made to payroll data

Answer

An audit trail records every change to payroll data with timestamps and user IDs, enabling auditors to trace unauthorized or erroneous modifications.

Question 3

Which internal control requires a second approver before a payroll run is finalized?

Accepted Answer

Dual authorization or dual approval

Answer

Dual authorization requires a second authorized person to review and approve payroll before it is processed, reducing the risk of unauthorized payments.

Question 4

During a payroll audit, what does 'reconciling payroll taxes' involve?

Accepted Answer

Confirming that amounts withheld from employees match amounts remitted to tax authorities

Answer

Reconciling payroll taxes means verifying that the amounts withheld from paychecks equal the amounts deposited with federal, state, and local tax agencies.

Question 5

What is a 'surprise audit' in payroll, and why is it used?

Accepted Answer

An unannounced review of payroll records to deter and detect ongoing fraud or errors

Answer

Surprise audits are unannounced reviews that deter fraudulent behavior because employees cannot prepare or conceal irregularities in advance.

(OCPS) Online Certified Payroll Systems Certified Professional Practice Test

(OCPS) Online Certified Payroll Systems Certified Professional Practice Test

OCPS OCPS Payroll Auditing & Internal Controls 2