Chapter 15: Payroll

Question 1

Payroll Cycle

Answer 1

the end to end processes necessary to obtain labor services in exchange for cash.
get cash get labor services

Question 2

5 steps to payroll cycle

Answer 2

1. hire terminate, promote employees
2. receive services
3. process payroll
4. disburse payroll
5. pay taxes and benefits

Question 3

HRM departement is responsible for

Answer 3

updating the payroll master database for internally initiated changes related to employment

Question 4

Payroll department updates

Answer 4

information about tax rates and other payroll deduction when it receives notification of changes from various government units and insurance companies.

Question 5

unauthorized changes to payroll master data

Answer 5

1. restrict access

2. segregation of HRm department updates master data but only payroll department issues checks

Question 6

Inaccurate updating of payroll manster data

Answer 6

1. data processing integrity controls

2. review of all changes to master payroll data

Question 7

inaccurate time and attendance data

Answer 7

1. source data automation for data capture
2. biometric authentication
   3, segregation of duties (reconciliation of jot time tickets to time cards)
3. supervisory review

Question 8

Payroll register

Answer 8

lists each employee’s gross pay, payroll deductions, and net pay in a multicolumn format

Question 9

deduction register

Answer 9

lists the miscellaneous voluntary deductions for each employee

Question 10

errors in processing payroll

Answer 10

1. data processing integrity controls
2. supervisory review of payroll register and other reports
3. issuing earnings statements to employees
4. review of IRS guidelines to ensure proper classification of workers as either employees or independent contractors

Question 11

batch totals

Answer 11

calculated at the time of data entry and then checked against comparable totals calculated during each stage of processing. (hash totals)

Question 12

Cross-footing the payroll register

Answer 12

total of the net pay column should equal the total of gross pay less total deductions.

Question 13

payroll clearing account

Answer 13

general ledger account that is used in a two step process to check the accuracy and completeness of recording payroll costs and their subsequent allocation to appropriate cost centers.

Question 14

who approves the payroll register

Answer 14

AP

Question 15

what does AP do

Answer 15

approve the payroll register

Question 16

what two docs should be reviewed before cashier prepares and signs check

Answer 16

payroll register and disbursement voucher,

Question 17

theft of fraudulent distribution of paychecks

Answer 17

1. restrict physical accesses
2. pre numbering and periodically account for all payroll checks
3. require proper supporting docs for all paychecks
4. segregation of cashier vs. AP.
5. restrict acces to payroll master database
6. verify all employee identities

Question 18

Failure to make required payments

Answer 18

configure of system to make required payments using current instructions from IRS

Question 19

inaccurate payments

Answer 19

1. process integrity controls
2. supervisory review of reports
3. employee review of earning statement

Question 20

Payroll service bureau

Answer 20

maintains the payroll master data for each of its clients and process payroll for them

Question 21

professional Employer Organization (PEO)

Answer 21

processes payroll but also provides HRM services such as employee benefit design and administration,.