Exam 10: Expenditures Processes and Controls Payroll and Fixed Assets

Internal control problems would be likely to result if a company's payroll department supervisor was also responsible for:

Many companies use independent, internet-based service providers to handle their payroll processing.These payroll providers specialize in offering solutions and constant access to payroll information.

The internal control process of requiring physical controls in place in areas where fixed assets are held, will help to minimize the risk of:

Internal control activities within the payroll process, identified as authorization, would include which of the following?

This item would include explanations concerning the qualifications and responsibilities of each position shown on organization chart.The item is also supported by policies and procedures manuals that outline specific activities performed by each position.

Activities involved with the fixed assets continuance phase of the fixed assets processes include all of the following, except:

Payroll outsourcing has become popular and prevalent) become is offers increased convenience and confidentiality.

The term "ghost employee" means that:

The document is prepared in order to map out the jobs and reporting relationships within an organization.This may include only top branches of an organization or may include all positions within the company.

Internal control activities within the payroll process, identified as adequate records and documents, would include which of the following?

Fixed assets are one area where earnings management may be prevalent due to the judgmental nature of the underlying data.

The acquisition of fixed assets is normally initiated by a user department when they identify a need for a new asset, either to replace an existing asset or to enhance its current pool.

If a new cost is incurred related to an asset that is considered to enhance that, either by extending the useful life or increasing the efficiency, the fixed asset accountant must make sure the appropriate adjustments are made to the fixed asset subsidiary ledger.

Which of the following procedures would be most useful in determining the effectiveness of a company's internal controls regarding the existence or occurrence of payroll transactions?

Before the paychecks are sent to management for authorization, the human resources department should compare the hours reported on the time sheets with the hours shown on the payroll register.

The policies and procedures involved in purchasing property; capturing and maintaining relevant data about the assets; paying for and recording the related assets; depreciation and other expenses; and gains or losses are collectively referred to as:

This document is a financial plan detailing all of the company's investments in fixed assets and other investments.

Assets to be included in the fixed asset pool would include all of the following, except:

For proper segregation of duties, the department that should authorize new employees for payroll would be:

The human resources department should be responsible for the record keeping function related to payroll.