The Most Vital Control in Preventing Unauthorized Changes to the Payroll

question 56

Multiple Choice

The most vital control in preventing unauthorized changes to the payroll master file is

• A) hiring totally honest people to access and make changes to this file.
• B) segregation of duties between the preparation of paychecks and their distribution.
• C) segregation of duties between the authorization of changes and the physical handling of paychecks.
• D) having the controller closely review and then approve any changes to the master file.

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Definitions:

Endorsed

The act of signing the back of a negotiable instrument, such as a check, thus transferring rights or title to another party.

Payee

The party in whose favor a check, draft, or note is made, entitled to receive the payment from the payer.

Drawer

The person or entity that writes a check or draft instructing the drawee to pay someone else.

Internal Control

A system within a business that oversees its operations and financial processes to ensure accuracy and compliance.