An example of an internal control weakness is to assign the payroll department the responsibility for:
preparing the payroll expense distribution
distributing the payroll checks
filing payroll tax reports
preparing journal entries for payroll expense
Payroll department is responsible for distributing the payroll checks, complying with tax laws (filing payroll tax reports) and preparing paper work regarding payroll (preparig journal entries for payroll expense.
Preparing the payroll expense distribution is not the responsibility of the payroll department.
If preparing the payroll expense distribution is assigned to the payroll department, there is said to be a weakness in the internal control. As the payroll expense is related to the payroll department, payroll expense distribution should not be assigned to the payroll department.
Correct Option: Preparing the Payroll Expense Distribution
Get Answers For Free
Most questions answered within 1 hours.