An auditor most likely would assess control risk at high if the payroll department supervisor is responsible for
A) examining authorization forms for new employees.
B) comparing payroll registers with original batch transmittal data.
C) authorizing payroll rate changes for all employees.
D) hiring all subordinate payroll department employees.
AICPA: BB Industry
AICPA: FN Risk Analysis
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Question

Quizplus · Accepted Answer

Authorizing payroll rate changes for all employees is a significant responsibility that requires a high level of trust and access to sensitive information. If the payroll department supervisor has the authority to make such changes, there is a risk that they could make unauthorized or fraudulent changes. This increases control risk, which means the auditor would need to perform more extensive testing to ensure that the payroll process is functioning effectively. The other activities listed are important controls, but they do not pose as high of a risk for control failure.

An Auditor Most Likely Would Assess Control Risk at High