The key to preventing unauthorized changes to the payroll master file is
A) hiring totally honest people to access and make changes to this file.
B) segregation of duties between the preparation of paychecks and their distribution.
C) segregation of duties between the authorization of changes and the physical handling of paychecks.
D) having the controller closely review and then approve any changes to the master file.

Question

Quizplus · Accepted Answer

By segregating the duties between the authorization of changes and the physical handling of paychecks, it ensures that no one person has complete control over the payroll process, thus preventing unauthorized changes to the master file. Hiring honest people is not a reliable control as people's behaviors can change. Segregation of duties between the preparation of paychecks and their distribution is also a good control but it does not specifically address changes to the master file. Having the controller closely review and approve any changes is also a good control, but it may not be enough on its own as the controller may be overwhelmed with other responsibilities and may not catch all changes.

The Key to Preventing Unauthorized Changes to the Payroll Master