Which of the following situations represents a serious control weakness?
A) Timekeeping is independent of the payroll department.
B) Paychecks are distributed by the employees' immediate supervisor.
C) Time cards are reconciled with job tickets.
D) Personnel is responsible for updating employee records,including creation of records for new hires.

Question

Quizplus · Accepted Answer

Paychecks being distributed by the employees' immediate supervisor represents a serious control weakness, as it creates an opportunity for fraudulent activity such as falsifying time records or manipulating pay rates. Paychecks should be distributed by a separate department or individual from the one responsible for approving and processing payroll. Choices A, C, and D each represent reasonable controls.

Which of the Following Situations Represents a Serious Control Weakness