An example of an internal control weakness is to assign the payroll department the responsibility for:
A)Preparing the payroll expense distribution.
B)Preparing the payroll checks.
C)Authorizing increases in pay.
D)Preparing journal entries for payroll expense.

Question

Quizplus · Accepted Answer

Authorizing increases in pay should be a responsibility of a higher management level or a separate department to ensure segregation of duties and to prevent potential fraud or errors. Assigning this task to the payroll department creates a conflict of interest and weakens internal controls.

An Example of an Internal Control Weakness Is to Assign