Which of the Following Best Describes Effective Internal Control Over

question 3

Multiple Choice

Which of the following best describes effective internal control over payroll?

• A) The preparation of the payroll must be under the control of the personnel department.
• B) The confidentiality of employee payroll data should be carefully protected to prevent fraud.
• C) The duties of hiring, payroll computation, and payment to employees should be segregated.
• D) The payment of cash to employees should be replaced with payment by checks.

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Definitions:

Double Counting

The fallacy of counting the same item or transaction more than once in economic calculations, leading to inaccuracies.

Gross Domestic Product

The total value of all goods and services produced within a country's borders in a specific time period, a primary indicator of economic health.

Value Added

The increase in value that a company adds to its inputs or raw materials before selling the final product, typically measured as the difference between input costs and output prices.

Government Bond

A type of investment security issued by a government to finance its expenditures, offering periodic interest payments and the return of principal at maturity.