A CPA reviews a client's payroll procedures.The CPA would consider internal control to be less than effective if a payroll department supervisor was assigned the responsibility for:
A)Distributing payroll checks to employees
B)Reviewing and approving time reports for subordinate employees
C)Hiring subordinate employees
D)Initiating requests for salary adjustments for subordinate employees

Question

Quizplus · Accepted Answer

Distributing payroll checks to employees by a payroll department supervisor could lead to potential fraud or misappropriation of funds, as it does not provide adequate segregation of duties. Segregation of duties is a key principle of internal control, aiming to reduce the risk of errors or fraud by dividing responsibilities among different individuals.

A CPA Reviews a Client's Payroll Procedures