Which of the following situations represents an internal control weakness in the payroll department?
A)Payroll department personnel are rotated in their duties.
B)Paychecks are distributed by the employees' immediate supervisor.
C)Payroll records are reconciled with quarterly tax reports.
D)The timekeeping function is independent of the payroll department.

Question

Quizplus · Accepted Answer

Paychecks being distributed by the employees' immediate supervisor is a potential internal control weakness because it can create an opportunity for fraudulent practices, such as ghost employees or inflated salaries. The other options represent internal control strengths: the rotation of personnel maintains segregation of duties and reduces the risk of fraud, reconciling payroll records with tax reports ensures accuracy and completeness, and having an independent timekeeping function reduces the risk of errors or misrepresentations.

Which of the Following Situations Represents an Internal Control Weakness