accounting information systems, 13e (romney/steinbart

Accounting Information Systems, 13e (Romney/Steinbart)

Chapter 15 The Human Resources Management and Payroll Cycle

15.1 Describe the major business activities and related information processing operations performed in the human resources management (HRM)/payroll cycle.

1) Which activity below is not performed by Human Resources management (HRM)?A) compensation B) training C) discharge D) recruitment and hiring Answer: AObjective: Learning Objective 1Difficulty: EasyAACSB: Analytic

2) Which department should have the sole ability to provide information to the AIS about hiring, terminations, and pay rate changes? A) payroll B) timekeeping C) production D) HRM Answer: DObjective: Learning Objective 1Difficulty: EasyAACSB: Analytic

3) Which of the following is generally not a major sourceDifficulty : of input to a payroll system? A) payroll rate changesB) time and attendance dataC) checks to insurance and benefits providers D) withholdings and deduction requests from employees Answer: CObjective: Learning Objective 1Difficulty: EasyAACSB: Analytic

4) Who does the payroll system issue checks to?A) employees and to banks participating in direct deposit B) a company payroll bank account C) government agenciesD) All of the above are correct. Answer: DObjective: Learning Objective 1Difficulty: EasyAACSB: Analytic

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5) Experts estimate that, on average, the costs associated with replacing an employee are about ________ the employee's annual salary. A) one-quarter ofB) one-half of C) one and one-half times D) twice Answer: CObjective: Learning Objective 1Difficulty: ModerateAACSB: Analytic

6) For recording time spent on specific work projects, manufacturing companies usually use a A) job time ticket. B) time card. C) time clock. D) labor time card. Answer: AObjective: Learning Objective 1Difficulty: EasyAACSB: Analytic

7) Which of the following statements is false regarding the use of incentives, commissions and bonuses in the payroll system?A) Using incentives, commissions, and bonuses requires linking the payroll system and the information systems of sales and other cycles in order to collect the data used to calculate bonuses.B) Bonus/incentive schemes must be properly designed with realistic, attainable goals that can beobjectively measured.C) Incentive schemes can result in undesirable behavior.D) All of the above are true.Answer: DObjective: Learning Objective 1Difficulty: ModerateAACSB: Analytic

8) Identify the item below that is not a desired result of an employee bonus systems. A) Employees may recommend unnecessary services to customers in order to exceed set sales quotas and earn a bonus.B) Employees may look for ways to improve service.C) Employees may analyze their work environment and find ways to cut costs.D) Employees may work harder and may be more motivated to exceed target goals to earn a bonus.Answer: AObjective: Learning Objective 1Difficulty: EasyAACSB: Analytic

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9) ________ are used to transmit time and attendance data directly to the payroll processing system.A) Badge readersB) Electronic time clocksC) Magnetic cardsD) none of the aboveAnswer: BObjective: Learning Objective 1Difficulty: EasyAACSB: Analytic

10) Payroll deductions fall into the broad categories of ________ and ________. A) payroll tax withholdings; voluntary deductions B) unemployment; social security taxes C) unemployment taxes; income taxes D) voluntary deductions; income taxes Answer: AObjective: Learning Objective 1Difficulty: EasyAACSB: Analytic

11) Which of the following is not classified as a voluntary deduction? A) pension plan contributions B) social security withholdings C) insurance premiums D) deductions for a charity organization Answer: BObjective: Learning Objective 1Difficulty: EasyAACSB: Analytic

12) Which type of payroll report contains information such as the employees' gross pay, payroll deductions, and net pay in a multicolumn format? A) payroll register B) deduction register C) employee earnings statement D) federal W-4 form Answer: AObjective: Learning Objective 1Difficulty: EasyAACSB: Analytic

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13) Which type of payroll report lists the voluntary deductions for each employee?A) payroll register B) deduction register C) earnings statement D) federal W-4 form Answer: BObjective: Learning Objective 1Difficulty: EasyAACSB: Analytic

14) Which type of payroll report includes the details of the current paycheck and deductions as well as year-to-date totals?A) payroll register B) deduction register C) earnings statement D) federal W-4 form Answer: CObjective: Learning Objective 1Difficulty: EasyAACSB: Analytic

15) An effective way an organization can eliminate paper paychecks while maintaining adequate accounting records is to A) pay in cash only. B) pay with money orders. C) use direct deposit. D) use Electronic Funds Transfer. Answer: CObjective: Learning Objective 1Difficulty: EasyAACSB: Analytic

16) Companies that specialize in processing payroll are known asA) paycheck distribution companies.B) payroll service bureaus.C) professional employer organizations.D) semi-governmental organizations.Answer: BObjective: Learning Objective 1Difficulty: EasyAACSB: Analytic

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17) Which organization provides payroll processing as well as other HRM services, like employee benefit design and administration?A) title companiesB) payroll service bureauC) professional employer organizationD) paycheck distribution companiesAnswer: CObjective: Learning Objective 1Difficulty: EasyAACSB: Analytic

18) Which of the following isfnot a benefit of using a payroll service bureau or a professional employer organization?A) freeing up of computer resourcesB) increased internal controlC) reduced costsD) wider range of benefitsAnswer: BObjective: Learning Objective 1Difficulty: EasyAACSB: Analytic

19) Many companies offer their employees a "cafeteria" approach to voluntary benefits in which employees can pick and choose the benefits they want. This plan is normally called a(n) A) elective plan. B) menu options benefit plan. C) flexible benefit plan. D) buffet plan. Answer: CObjective: Learning Objective 1Difficulty: EasyAACSB: Analytic

20) Pay rate information should be stored in A) employees' personnel files. B) employee subsidiary ledgers. C) the payroll master file. D) electronic time cards. Answer: CObjective: Learning Objective 1Difficulty: ModerateAACSB: Analytic

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21) The payroll transaction file should contain A) entries to add new hires. B) time card data. C) changes in tax rates. D) All of the above are correct. Answer: BObjective: Learning Objective 1Difficulty: ModerateAACSB: Analytic

22) The document that lists each employee's gross pay, payroll deductions, and net pay in a multicolumn format is called A) an employee earnings statement. B) the payroll register. C) a deduction register. D) an employee time sheet summary. Answer: BObjective: Learning Objective 1Difficulty: EasyAACSB: Analytic

23) As each payroll transaction is processed, the system should also A) allocate labor costs to appropriate general ledger accounts B) use cumulative totals generated from a payroll to create a summary journal entry to be posted to the general ledger C) both A and B above D) The HRM system should not perform either activity A or B. Answer: CObjective: Learning Objective 1Difficulty: ModerateAACSB: Analytic

24) Direct deposit of employee paychecks is one way an organization can improve efficiency andreduce payroll-processing costs. Which statement regarding direct deposit isffalse? A) The cashier does not authorize the transfer of funds from the organization's checking account to a payroll checking account. B) The cashier does not have to sign employee paychecks. C) Employees who are part of a direct deposit program receive a copy of their paycheck indicating the amount deposited. D) Employees who are part of a direct deposit program receive an earnings statement on payday rather than a paper check. Answer: AObjective: Learning Objective 1Difficulty: ModerateAACSB: Analytic

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25) The employer pays a portion of some payroll taxes and employee benefits. Both the employee and employer pay which benefit or tax listed below? A) social security taxes B) federal income taxes C) state income taxesD) none of the above Answer: AObjective: Learning Objective 1Difficulty: EasyAACSB: Analytic

26) Identify the following item that should contribute to the efficiency of a payroll system.A) segregation of check distribution from payroll dutiesB) prompt redeposit of unclaimed paychecksC) a separate payroll bank accountD) direct deposit of checksAnswer: DObjective: Learning Objective 1Difficulty: EasyAACSB: Analytic

27) Which of the following documents would be likely to yield the greatest cost saving by converting from paper to electronic?A) payroll registerB) earnings statementC) deduction registerD) time cardAnswer: DObjective: Learning Objective 1Difficulty: EasyAACSB: Analytic

28) Describe the basic activities in an HRM/payroll cycle.Answer: The HRM/payroll cycle is a recurring set of business activities and related data processing operations associated with effectively managing the employee work force. Important activities in the HRM/payroll cycle include the following tasks: Recruitment and hiring of new employees. Training. Job assignment. Compensation (payroll). Performance evaluation. Discharge.Objective: Learning Objective 1Difficulty: EasyAACSB: Analytic

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29) Identify the two types of payroll deductions and give two examples of each type.Answer: Payroll deductions include: Payroll tax withholdings such as federal, state, and local income taxes, social security taxes, unemployment taxes; Voluntary deductions such as contributions to a pension plan, premium for group life, etc.Objective: Learning Objective 1Difficulty: EasyAACSB: Analytic

30) Why are accurate cumulative earnings records important? Answer: Accurate records of cumulative earnings are necessary because social security and other deductions have maximum earnings amounts upon which taxes are paid; and the appropriate amount of income and payroll taxes should be remitted to the government agencies. At the end of each calendar year, businesses must prepare and mail summary earnings statementsto every employee with earnings that year.Objective: Learning Objective 1Difficulty: ModerateAACSB: Analytic

31) Explain the functions of the payroll register, deduction register, and earnings statement. Answer: The payroll register is a report that lists each employee's gross pay, payroll deductions, and net pay for each pay period. The deduction register lists the voluntary deductions for each employee. The earnings statement lists the amount of gross pay, deductions, and net pay for the current period, as well as providing year-to-date totals.Objective: Learning Objective 1Difficulty: EasyAACSB: Analytic

32) What is the difference between a payroll service bureau and a professional employer organization?Answer: A payroll service bureau is a company that can be hired as an independent contractor tomaintain the payroll master file and perform the payroll processing activities for an organization. A professional employer organization is a company that provides not only full payroll services but also provides HRM services such as employee benefit design and administration.Objective: Learning Objective 1Difficulty: EasyAACSB: Analytic

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33) Discuss the various types and sources of input into the HRM/payroll cycle. Answer: An HRM/payroll system relies on input from various sources. Employees provide inputwhen they make changes in their discretionary deductions (contributions to charities or retirement plans); various departments provide data about the actual hours employees work. The HRM department provides information about employees who have been hired or terminated, pay-rate changes, and promotions. Government agencies provide tax rates and various instructions for meeting regulatory requirements. Insurance companies and other organizations provide instructions for calculating and remitting various withholding amounts.Objective: Learning Objective 1Difficulty: DifficultAACSB: Analytic

34) A growing number of companies require some of their upper level executives to spend time performing job duties of rank-and-file employees. When the CEO of Loews Hotels assumed the role of bellman, he discoveredA) that the company's polyester uniform caused him to sweat a great deal.B) evidence of fraud in several hotel locations.C) instances where company employees fell asleep on the job.D) situations where employees were not treating customers properly.Answer: AObjective: Learning Objective 1Difficulty: DifficultAACSB: Analytic

35) Executive immersion experiences are important because A) CEOs often have no idea what rank-and-file employees do on a daily basis.B) employees who have positive attitudes contribute to increasing company profits.C) many employees feel upper management is out of touch.D) it is important for organizations to take social responsibility seriously.Answer: BObjective: Learning Objective 1Difficulty: DifficultAACSB: Analytic

36) True or False: The HRM department should immediately delete records of employees who quit to prevent other employees from assuming their identities.Answer: FALSEObjective: Learning Objective 1Difficulty: EasyAACSB: Analytic

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37) Involving accountants in executive compensation plans is often especially helpful A) in keeping track of the executive compensation plan.B) in identifying the appropriate metrics to use when linking compensation to performance.C) in reducing the total amount of compensation paid to executives.D) in suggesting the appropriate amount of compensation executives should be paid.Answer: BObjective: Learning Objective 1Difficulty: ModerateAACSB: Analytic

38) Accountants can help executive compensation plan boards A) comply with legal and regulatory requirements.B) by identifying the best ways to keep the details of compensation plans out of the hands of external parties.C) avoid paying excessive amounts of "perks" to executives.D) distribute information regarding how well each executive is performing their job.Answer: AObjective: Learning Objective 1Difficulty: ModerateAACSB: Analytic

39) Form 941A) is filed each quarter to reconcile monthly tax payments with total tax liability for the quarter.B) is used in preparing labor-related reports for government agencies.C) is used for employee information and annual payroll reports.D) is used to document compliance with applicable regulations.Answer: AObjective: Learning Objective 1Difficulty: DifficultAACSB: Analytic

40) A workforlefinventory report A) is filed each quarter to reconcile monthly tax payments with total tax liability for the quarter.B) is used in preparing labor-related reports for government agencies.C) is used for employee information and annual payroll reports.D) is used to document compliance with applicable regulations.Answer: BObjective: Learning Objective 1Difficulty: DifficultAACSB: Analytic

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41) Professional employer organizations (PEOs) are especially attractive to small and mid-sized businesses for all of the following reasons exleptA) reduced costs.B) wider range of benefits.C) freeing up computer resources.D) improved service quality.Answer: DObjective: Learning Objective 1Difficulty: ModerateAACSB: Analytic

15.2 Discuss the key decisions to be made in the HRM/payroll cycle and identify the information needed to make those decisions.

1) The sales department administrative assistant has been assigning phone order sales to her brother-in-law, a company sales person. Company policy is to pay commissions only on orders directly received by sales people, not on orders received over the phone. The resulting fraudulentcommission payments might best have been prevented by requiring thatA) sales commission statements be supported by sales order forms signed by the customer and approved by the sales manager.B) sales order forms be prenumbered and accounted for by the sales department manager.C) sales orders and commission statements be approved by the accounting department.D) disbursement vouchers for commission payments be reviewed by the internal audit department and compared to sales commission statements and sales orders.Answer: AObjective: Learning Objective 2Difficulty: ModerateAACSB: Analytic

2) Because many HRM / payroll master databases typically contain only descriptive information (such as which employees possess which skills), many firms have deployed ________ to more effectively leverage employees knowledge and skills.A) relational databasesB) knowledge management systemsC) Resources, Events, and Agents (REA) databasesD) cardinality systemsAnswer: BObjective: Learning Objective 2Difficulty: ModerateAACSB: Analytic

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3) Identify the firm below where employees' knowledge is likely to be more valuable than the value of a company's tangible assets.A) international airlineB) law firmC) automobile manufacturerD) railroadAnswer: BObjective: Learning Objective 2Difficulty: ModerateAACSB: Analytic

4) True or False: Batch processing continues to be widely used to process payroll transactions.Answer: TRUEObjective: Learning Objective 2Difficulty: EasyAACSB: Analytic

5) Knowledge management systems (KMS) permit organizations to A) store employee solutions to specific problems in a shared database.B) learn from individuals external to the organization.C) perform background checks on potential employees.D) gain competitive business intelligence on competitors.Answer: AObjective: Learning Objective 2Difficulty: ModerateAACSB: Analytic

15.3 Identify the major threats in the HRM/payroll cycle and evaluate the adequacy of various internal control procedures for dealing with them.

1) Why is a separate payroll account used to clear payroll checks? A) for internal control purposes, to help limit any exposure to loss by the company B) to make bank reconciliation easier C) Banks don't like to commingle payroll and expense checks. D) All of the above are correct. Answer: AObjective: Learning Objective 3Difficulty: ModerateAACSB: Analytic

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2) The following control can reduce the distribution of fraudulent paychecks.A) Have internal audit investigate unclaimed paychecks. B) Allow department managers to investigate unclaimed paychecks. C) Immediately mark "void" across all unclaimed paychecks. D) Match up all paychecks with time cards. Answer: AObjective: Learning Objective 3Difficulty: ModerateAACSB: Analytic

3) When using electronic documents, ________ increase(s) the accuracy of data entry. A) access controls B) separation of duties C) general controls D) application controls Answer: DObjective: Learning Objective 3Difficulty: EasyAACSB: Analytic

4) The most vital control in preventing unauthorized changes to the payroll master file is A) hiring totally honest people to access and make changes to this file. B) segregation of duties between the preparation of paychecks and their distribution. C) segregation of duties between the authorization of changes and the physical handling of paychecks. D) having the controller closely review and then approve any changes to the master file. Answer: CObjective: Learning Objective 3Difficulty: DifficultAACSB: Analytic

5) Which of the following is not a potential effect of inaccurate data on employee time cards? A) increased labor expenses B) erroneous labor expense reports C) damaged employee morale D) inaccurate calculation of overhead costs Answer: DObjective: Learning Objective 3Difficulty: ModerateAACSB: Analytic

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6) Which control would be most appropriate to address the problem of inaccurate payroll processing? A) encryption B) direct deposit C) cross-footing of the payroll register D) an imprest payroll checking account Answer: CObjective: Learning Objective 3Difficulty: DifficultAACSB: Reflective Thinking

7) The purpose of a general ledger payroll clearing account is A) to check the accuracy and completeness of payroll recording and its allocation to cost centers.B) to make the bank reconciliation easier. C) to make sure that all employees are paid correctly each week. D) to prevent the cashier from having complete control of the payroll cycle. Answer: AObjective: Learning Objective 3Difficulty: ModerateAACSB: Analytic

8) A "zero balance check" refers to which of the following control procedures? A) a type of batch totalB) cross-footing the payroll register C) the payroll clearing account shows a zero balance once all entries are postedD) trial balance showing that debits equal credits Answer: CObjective: Learning Objective 3Difficulty: ModerateAACSB: Analytic

9) All of the following are controls that should be implemented in a payroll process, exleptA) supervisors distribute paychecks since they should know all employees in their department.B) someone independent of the payroll process should reconcile the payroll bank account.C) sequential numbering of paychecks and accounting for the numbers.D) restrict access to blank payroll checks and documents.Answer: AObjective: Learning Objective 3Difficulty: ModerateAACSB: Analytic

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10) What is the best control to reduce the risk of losing payroll data? A) passwords B) physical security controls C) backup and disaster recovery procedures D) encryption Answer: CObjective: Learning Objective 3Difficulty: EasyAACSB: Analytic

11) The threat of violation of employment laws relates directly to which activity?A) payroll processingB) collecting employee time dataC) hiring and recruiting D) all of the above Answer: CObjective: Learning Objective 3Difficulty: ModerateAACSB: Analytic

12) What is a potential threat to the specific activity of payroll processing? A) hiring unqualified employees B) poor system performance C) violations of employment laws D) unauthorized changes to the payroll master file Answer: DObjective: Learning Objective 3Difficulty: ModerateAACSB: Analytic

13) The results of an internal audit finds that there is a problem with inaccurate time data being entered into the payroll system. What is an applicable control that can help prevent this event from occurring in the future? A) proper segregation of duties B) automation of data collection C) sound hiring procedures D) review of appropriate performance metrics Answer: BObjective: Learning Objective 3Difficulty: EasyAACSB: Analytic

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14) Which of the following is a control that can be implemented to help prevent paychecks beingissued to a "phantom" or "ghost" employee? A) The cashier should sign all payroll checks.B) Sequentially prenumber all payroll checks.C) Use an imprest account to clear payroll checks.D) Paychecks should be physically distributed by someone who does not authorize time data or record payroll.Answer: DObjective: Learning Objective 3Difficulty: ModerateAACSB: Analytic

15) The average annual management salary at Iyov Management is $80,000. If the average turnover rate for employees is ten per year, what is the approximate average annual cost of turnover? A) $80,000B) $400,000C) $800,000D) $1,200,000Answer: DObjective: Learning Objective 3Difficulty: ModerateAACSB: Analytic

16) Which of the following will limit a firm's potential loss exposure from paycheck forgery?A) segregation of check distribution from payroll dutiesB) prompt redeposit of unclaimed paychecksC) a separate payroll bank accountD) direct deposit of checksAnswer: CObjective: Learning Objective 3Difficulty: EasyAACSB: Analytic

17) Which of the following is a control that addresses the threat of unauthorized changes to the payroll master file?A) field checksB) batch totalsC) segregation of dutiesD) sound hiring proceduresAnswer: CObjective: Learning Objective 3Difficulty: EasyAACSB: Analytic

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18) For the payroll register below, all the following data entry controls would be useful exlept

A) validity check on Fed. TaxB) sequence check on Employee No.C) limit check on HoursD) field check on Pay RateAnswer: AObjective: Learning Objective 3Difficulty: EasyAACSB: Analytic

19) For the payroll register below, all the following processing controls would be useful exlept

A) concurrent update controlB) cross-footing balance testC) mathematical accuracy testD) hash total on Employee No.Answer: AObjective: Learning Objective 3Difficulty: EasyAACSB: Analytic

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20) Describe benefits and threats of incentive and bonus programs.Answer: Sales staffs are often paid either on a straight commission basis or a combination of a salary plus commissions. This is done to keep sales at a certain level or to increase sales. The HRM/payroll system will need input from the sales and other cycles to properly calculate commissions and bonuses for such employees. It is important that an incentive and bonus systemsets realistic, attainable goals that are congruent with corporate objectives. It is also important that managers monitor incentive and bonus goals and ensure that the attainment of such goals is appropriate for the organization and does not lead to undesirable behavior, which can result from poorly designed incentive schemes.Objective: Learning Objective 3Difficulty: ModerateAACSB: Analytic

21) Explain benefits to companies and to employees of using electronic direct deposit for payroll. Answer: Direct deposit of paychecks provide a savings to employers because the costs of purchasing, processing, and distributing paper checks is eliminated. Using direct deposit also reduces postage and bank fees. The cashier's time can be better spent because paychecks do not have to be signed. Employees save time as well as they do not have to make a physical trip to thebank to cash their checks. Direct deposit is safer as it eliminates misplaced paychecks and reduces the possibility of the theft of checks.Objective: Learning Objective 3Difficulty: ModerateAACSB: Reflective Thinking

22) What factors should be considered in outsourcing payroll to a payroll service bureau? Discuss the advantages and disadvantages of using a payroll service bureau to process a payroll. Answer: The following questions should be considered: How much does the service cost? How would the data be submitted—online or hand carried? What kind of reports and documents couldbe obtained from the service bureau? How would the service interface with the existing general ledger system? What resources are now being devoted to payroll and how could these resources be re-deployed into other areas? Could security and control be improved by the outsourcing? What would be the time length of a contract for outsourcing services? Could the service bureau system be integrated so that an online query could be made by the organization? What kind of track record does the service bureau have with other clients? Are there new technologies and approaches that would become available to the company via the service bureau? Advantages: No need to deal with complexity and changes in tax codes. No need to worry about what to do if equipment crashes. Less chance of employees accessing the payroll files (confidentiality). Possible efficiency and cost reductions. Wider range of benefits. Freed-up computer resources. Disadvantages: Less control over the payroll files because they are stored off-site. Extra costs forany special reports. Slower response to ad hoc queries.Objective: Learning Objective 3Difficulty: ModerateAACSB: Analytic

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23) Discuss the threat of unauthorized changes to the payroll master file and its consequences. Answer: Many problems may result when there are unauthorized changes to the payroll master file. Unauthorized changes may be made to employee pay rates, resulting in the company paying too much in wages. "Ghost" or "phantom" employees may be added to the payroll master to divert funds to dishonest employees through the issuance of paychecks to such "employees." Likewise, terminated employees may still be paid, resulting in the fraudulent diversion of payrollfunds. Two controls that should be implemented and maintained to provide overall control of the payroll master file: proper segregation of duties and controlling access to the file. Good internal control dictates that only authorized HRM personnel be allowed to update the payroll master file for any hiring, termination, pay raise, and promotion. HRM personnel, who have such access to the payroll master file, should never be allowed to directly participate in actual payroll processing or paycheck distribution. This way an adequate control is created to match actual paychecks (or earnings statements when direct deposit is in place) with employees when a manager, supervisor, or other third party hand out the checks (or earnings statements). Also, a different individual should approve all changes to the payroll master file in writing other than theindividual who recommends or initiates the changes. User IDs and passwords should always be used to control access to the payroll master file, and an access control matrix should be established to define what actions each authorized employee is allowed to make and confirms thefiles the employee may access.Objective: Learning Objective 3Difficulty: DifficultAACSB: Analytic

24) What controls are available to address the threat of payroll errors? Answer: Three types of controls can be used to circumvent payroll errors in an HRM/payroll system. Batch totals are used to verify totals entered into the system both at the time of data entryand at each stage in the processing. Hash totals are particularly useful in this regard, since hash totals calculated at the time of original data entry and again at each stage in the process can be compared. When the comparisons match throughout the process, three conclusions can be made: 1) all payroll records have been processed; 2) the data input was accurate; and 3) no bogus time cards were entered at any point after initial input. Upon completion of a payroll, the payroll register should be cross-footed to verify that the totals of the net pay column and other deductioncolumns equal the total of the gross pay column. A third control is the use of a payroll clearing account. This is a general ledger account that can be used as part of a two-step accuracy and completeness process. First, the payroll control account will be debited for the amount of the gross pay for the pay period; cash and other various withholding liability accounts are credited. Second, the cost accounting process distributes labor costs to various expense categories and credits the payroll control account for the total amount of the debits made to the other accounts. The result is that the payroll control account will have a zero balance. This becomes an internal check known as a zero balance check, indicating that the proper postings have been made to all of the accounts associated with payroll for a given pay period.Objective: Learning Objective 3Difficulty: ModerateAACSB: Analytic

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25) Using financial incentives requires organizations to A) pay employees less than they would have to if pay was a fixed salary.B) better monitor employee attendance.C) link the payroll system to other cycles to calculate incentive payments.D) better monitor employee effort.Answer: CObjective: Learning Objective 3Difficulty: ModerateAACSB: Analytic

26) Source data automation is often effective in reducingA) unintentional errors.B) intentional errors.C) accuracy.D) theft.Answer: CObjective: Learning Objective 3Difficulty: ModerateAACSB: Analytic

27) A payrollfllearingfallount is used to A) check the accuracy of payroll costs.B) speed up payroll transaction processing.C) reduce the transaction costs associated with payroll transaction processing.D) eliminate the need to manually record payroll transactions.Answer: AObjective: Learning Objective 3Difficulty: ModerateAACSB: Analytic

28) All of the following regarding payrollflhelksfis correct exleptA) access to payroll checks should be restricted.B) payroll checks should be sequentially pre-numbered.C) payroll checks should be drawn on the organization's regular bank account(s).D) the cashier should sign payroll checks.Answer: CObjective: Learning Objective 3Difficulty: ModerateAACSB: Analytic

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29) Falk Noam is the internal auditor for Matan Incorporated. Before investigating the HRM / payroll cycle at Matan, Falk decided to read up on the proper segregation of duties regarding payroll disbursement processes. For strongest segregation of duties, the ________ should distribute paychecks.A) accounts payable departmentB) cashierC) internal audit departmentD) external auditorAnswer: BObjective: Learning Objective 3Difficulty: ModerateAACSB: Analytic

30) Falk Noam is the internal auditor for Matan Incorporated. Before investigating the HRM / payroll cycle at Matan, Falk decided to read up on the proper segregation of duties regarding payroll disbursement processes. For strongest segregation of duties, the ________ should record payroll.A) accounts payable departmentB) cashierC) internal audit departmentD) external auditorAnswer: AObjective: Learning Objective 3Difficulty: ModerateAACSB: Analytic

31) Falk Noam is the internal auditor for Matan Incorporated. Before investigating the HRM / payroll cycle at Matan, Falk decided to read up on the proper segregation of duties regarding payroll disbursement processes. For strongest segregation of duties, the ________ should periodically observe the paycheck distribution process.A) accounts payable departmentB) cashierC) internal audit departmentD) external auditorAnswer: CObjective: Learning Objective 3Difficulty: ModerateAACSB: Analytic

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accounting information systems, 13e (romney/steinbart

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