Payroll Fraud May Occur in Which of the Following Ways

question 116

Multiple Choice

Payroll fraud may occur in which of the following ways?

• A)Payroll transactions are processed for fictitious employees and the funds are diverted for personal use
• B)When there is frequent turnover, there is risk that a new employee will not get on the payroll promptly
• C)Management may misclassify or understate labor costs for government contract work
• D)All of the answer choices are correct.

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Definitions:

RRSP

Registered Retirement Savings Plan, a Canadian financial vehicle for individuals to save for retirement on a tax-sheltered basis.

Nominal Rate

The advertised or stated interest rate on a loan or investment, not accounting for any fees or compounding of interest.

Effective Rate

The real interest rate on an investment or loan, taking into account the effect of compounding over a given period.

Compounding Interval

The frequency at which interest is added to the principal amount of an investment or loan which can affect the total interest earned or paid.