OCPS Risk Assessment & Mitigation 3

Question 1

Which scenario BEST illustrates inherent risk in a payroll context?

Accepted Answer

Risk present before any mitigating controls are implemented

Answer

Inherent risk is the natural level of risk in a process or activity before any controls are applied to reduce it.

Question 2

An organization implements automated payroll tax withholding calculations. This change PRIMARILY reduces which type of risk?

Accepted Answer

Manual calculation error risk

Answer

Automating calculations eliminates human arithmetic errors, directly reducing the risk of incorrect tax withholdings.

Question 3

Which IRS penalty scenario represents the highest financial risk for late payroll tax deposits?

Accepted Answer

15% penalty for amounts still unpaid after 10 days past the IRS notice

Answer

The IRS imposes a 15% penalty on payroll tax amounts that remain unpaid 10 days after an IRS demand notice, representing the highest tier.

Question 4

A risk register entry shows a payroll fraud scenario with likelihood=3 and impact=4 on a 5-point scale. What is the risk score?

Accepted Answer

12

Answer

Risk score is calculated by multiplying likelihood by impact: 3 × 4 = 12.

Question 5

Which payroll practice BEST mitigates the risk of fictitious employee ('ghost employee') fraud?

Accepted Answer

Periodic headcount reconciliation between HR and payroll records

Answer

Regular reconciliation of active employee lists between HR and payroll departments catches ghost employees that exist only in payroll records.

(OCPS) Online Certified Payroll Systems Certified Professional Practice Test