Which of the Following Situations Represents a Serious Control Weakness

question 41

Multiple Choice

Which of the following situations represents a serious control weakness?

• A) Timekeeping is independent of the payroll department.
• B) Paychecks are distributed by the employees' immediate supervisor.
• C) Time cards are reconciled with job tickets.
• D) Personnel is responsible for updating employee records,including creation of records for new hires.

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Definitions:

Unrecognized Net Loss

A financial loss that has occurred but has not yet been reported in the company's financial statements.

Actuaries

Professionals who assess the financial impact of risk and uncertainty, utilizing mathematics, statistics, and financial theory to study uncertain future events, especially in the insurance and finance fields.

Unrecognized Prior Service Cost

Costs related to pension plan benefits earned in previous periods but not recognized at that time, due to changes in plan terms or estimations.

Years-of-Future-Service Method

The Years-of-Future-Service Method is a technique used in accounting to calculate pension or retirement benefits, based on the projected years of service of an employee.