A CA reviews a client's payroll procedures.The CA would consider internal control to be less than effective if a payroll department supervisor was assigned the responsibility for:
A)Distributing payroll cheques to employees
B)Reviewing and approving time reports for subordinate employees
C)Hiring subordinate employees
D)Initiating requests for salary adjustments for subordinate employees

Question

Quizplus · Accepted Answer

Assigning the responsibility of distributing payroll cheques to a payroll department supervisor can lead to a conflict of interest and increase the risk of fraud or errors, as it combines record-keeping and custody functions.

A CA Reviews a Client's Payroll Procedures