Which of the following is a major control risk in the payroll area?
A) Theft of inventory by staff
B) Fictitious persons cashing paychecks
C) Expenses being recorded as assets in order to manipulate earnings
D) Contracts being awarded to relatives of employees

Question

Quizplus · Accepted Answer

Fictitious persons cashing paychecks is a major control risk in the payroll area as it could lead to misappropriation of company funds. This risk can be mitigated by implementing proper controls such as verifying employee identities before issuing paychecks and ensuring that payroll records are accurate and up-to-date. The other choices listed (theft of inventory, expenses recorded as assets, and contracts awarded to relatives) are risks in other areas of the business and not specifically related to payroll.

Which of the Following Is a Major Control Risk in the Payroll