A CPA Reviews a Client's Payroll Procedures

question 81

Multiple Choice

A CPA reviews a client's payroll procedures.The CPA would consider internal control to be less than effective if a payroll department supervisor was assigned the responsibility for:

• A)Reviewing and approving time reports for subordinate employees.
• B)Distributing payroll checks to employees.
• C)Hiring subordinate employees.
• D)Initiating requests for salary adjustments for subordinate employees.

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Definitions:

Medicaid

Medicaid is a government-funded program in the United States that provides health care services to low-income individuals and families.

Corporate Profits

The total earnings of a company after subtracting production and operating costs, including taxes and interest.

Taxed Twice

Refers to a situation where the same income or financial transaction is subject to taxation in two different instances or under two different tax jurisdictions.

Equity

Fairness or justice in the way people are treated within the economy, often relating to the distribution of wealth.