Question 1

The ethical principle of due care pertains to the upholding of rights and justice of stakeholders.

Accepted Answer

A) True 
 B)False

Question 2

Which most closely identifies why it is important for payroll accountants to adhere to the AICPA Code of Ethics?

Accepted Answer

A) To maintain company profitability. 
B) To overlook fraudulent actions of company officers. 
C) To protect the assets of the company and remit money owed to the government. 
D) To maintain personal standards only.

Question 3

Payroll-related legislation often reflects emerging issues in societal evolution.

Accepted Answer

A) True 
 B)False

Question 4

Payroll accounting systems may involve an integrated software package that contains business-planning tools.

Accepted Answer

A) True 
 B)False

Question 5

Worker's compensation insurance premiums:

Accepted Answer

A) Are the same amount for all employees of a company,regardless of employee task. 
B) Are remitted in full at the end of the year to ensure accuracy. 
C) Are mandated by the Fair Labor Standards Act. 
D) Are governed by state laws and vary according to worker job classification.

Question 6

Which of the following is not a privacy act related to payroll records?

Accepted Answer

A) Community Property Act of 1990. 
B) Freedom of Information Act. 
C) U.S.Department of Labor OCFO-1. 
D) U.S.Department of Health and Human Services Privacy Act 09-40-0006.

Question 7

The Worker's Compensation Act of 1935 legislated the payment of worker's compensation insurance.

Accepted Answer

A) True 
 B)False

Question 8

Which privacy act safeguards information contained in private personnel records and mandates information safekeeping?

Accepted Answer

A) DHHS Privacy Act 09-04-0006. 
B) Privacy Act of 1974. 
C) Common Law Privacy Act. 
D) Computer Fraud and Abuse Act of 1986.

Question 9

Worker's compensation is an insurance policy used for:

Accepted Answer

A) Wage continuation after job-related injuries. 
B) Payment of mandatory payroll taxes. 
C) Remittance of wages mandated by the FLSA. 
D) Settlement of payroll-related lawsuits.

Question 10

Leslie is the accountant for a major movie production.She is approached by a group of people from the press who ask her questions about the salaries of the actors and actresses involved in the film.According to the AICPA Code of Ethics,which principle most closely governs the appropriate conduct in this situation?

Accepted Answer

A) Responsibilities 
B) Due Care 
C) Integrity 
D) Public Interest

Question 11

Which Act extended medical benefits for certain terminated employees?

Accepted Answer

A) ADEA 
B) COBRA 
C) OSHA 
D) ERISA

Question 12

According to the Public Company Accounting Oversight Board,personal or family ownership in excess of five percent of a client's business may compromise an accountant's:

Accepted Answer

A) Due Care. 
B) Independence. 
C) Public Interest. 
D) Integrity.

Question 13

The ________ mandated that employers verify an employee's legal ability to work in the United States.

Accepted Answer

A) Personal Responsibility and Work Opportunity Reconciliation Act of 1996 
B) Health Insurance Portability and Accountability Act of 1996 
C) American Reinvestment and Recovery Act of 2009 
D) Immigration Reform and Control Act of 1986

Question 14

Peter is the owner of a fast-food franchise.When his payroll accountant quit,he hired his wife,Karen,to take over the payroll responsibilities.Peter prefers to review the payroll records prior to disbursement and often asks Karen to add or subtract amount from employee pay.Which ethical principle most closely describes Peter and Karen's unethical actions?

Accepted Answer

A) Objectivity and Independence 
B) Integrity 
C) Public Interest 
D) Responsibilities

Question 15

Which law requires a company to use certified payroll?

Accepted Answer

A) Walsh-Healey Public Contracts Act 
B) Copeland Anti-Kickback Act 
C) Davis-Bacon Act 
D) Sarbanes-Oxley Act

Question 16

Within how many days after initially commencing work must an employer report a new employee,according to PRWOR?

Accepted Answer

A) 7 
B) 10 
C) 20 
D) 30

Question 17

Which of the following represents a payroll system privacy breach by Susan,a payroll accountant?

Accepted Answer

A) Susan shares information about labor costs with company executives. 
B) Susan alerts department managers about potential FLSA violations in their departments. 
C) Susan discusses specific information about the company's federal contracts with friends during lunch. 
D) Susan places employee payroll files in a cabinet to which only she and her supervisor have access.

Question 18

Payroll taxes were instituted by the 16th Amendment to the United States Constitution:

Accepted Answer

A) To pay for governmental salaries. 
B) To make money from businesses that had employees. 
C) To fund infrastructure improvements of booming cities. 
D) To penalize people who needed employment.

Question 19

Michael is the payroll accountant for a non-profit.In his personal life,he is also a single father of three young children.On the day that payroll is supposed to be issued,his children are sick and he is unavailable to be at work.The employees' paychecks cannot be issued without his presence.Which ethical principle most closely governs this situation?

Accepted Answer

A) Responsibilities 
B) Objectivity and Independence 
C) Integrity 
D) Public Interest

Question 20

Prevailing local wages and wage classification strategies for government contractors were mandated by the ________.

Accepted Answer

A) Davis-Bacon Act 
B) Walsh-Healey Public Contracts Act 
C) Fair Labor Standards Act 
D) Equal Pay Act

Exam 1: Payroll Practices and System Fundamentals

The ethical principle of due care pertains to the upholding of rights and justice of stakeholders.

Which most closely identifies why it is important for payroll accountants to adhere to the AICPA Code of Ethics?

Payroll-related legislation often reflects emerging issues in societal evolution.

Payroll accounting systems may involve an integrated software package that contains business-planning tools.

Worker's compensation insurance premiums:

Which of the following is not a privacy act related to payroll records?

The Worker's Compensation Act of 1935 legislated the payment of worker's compensation insurance.

Which privacy act safeguards information contained in private personnel records and mandates information safekeeping?

Worker's compensation is an insurance policy used for:

Which Act extended medical benefits for certain terminated employees?

According to the Public Company Accounting Oversight Board,personal or family ownership in excess of five percent of a client's business may compromise an accountant's:

The ________ mandated that employers verify an employee's legal ability to work in the United States.

Which law requires a company to use certified payroll?

Within how many days after initially commencing work must an employer report a new employee,according to PRWOR?

Which of the following represents a payroll system privacy breach by Susan,a payroll accountant?

Payroll taxes were instituted by the 16th Amendment to the United States Constitution:

Prevailing local wages and wage classification strategies for government contractors were mandated by the ________.