OCPS OCPS Payroll Auditing & Internal Controls

Question 1

What is the primary purpose of a payroll internal audit?

Accepted Answer

To verify accuracy, compliance, and prevent fraud in payroll operations

Answer

To increase employee salaries

Answer

To replace the payroll department

Answer

To calculate quarterly bonuses

Question 2

Which control helps prevent a single employee from both adding new hires and processing payroll?

Accepted Answer

Segregation of duties

Answer

Dual authorization

Answer

Encryption

Answer

Outsourcing

Question 3

What is a 'ghost employee' in the context of payroll fraud?

Accepted Answer

A fictitious or terminated employee whose wages are fraudulently collected

Answer

A remote worker paid via direct deposit

Answer

A seasonal employee on unpaid leave

Answer

An employee with an anonymous HR file

Question 4

Which document is most commonly reviewed during a payroll audit to verify headcount accuracy?

Accepted Answer

Active employee roster cross-referenced with HR records

Answer

W-4 forms only

Answer

Quarterly earnings reports alone

Answer

Benefit enrollment forms

Question 5

What is a 'three-way match' in payroll auditing?

Accepted Answer

Verifying hours worked, approved timesheets, and pay stubs align

Answer

Matching federal, state, and local tax rates

Answer

Comparing three consecutive payroll cycles

Answer

Matching employee name, SSN, and bank account

Question 6

How often should organizations conduct payroll reconciliations as a best practice?

Accepted Answer

At least monthly, comparing payroll registers to general ledger entries

Answer

Only annually during tax season

Answer

Every five years

Answer

Only when an audit is scheduled