Which of the Following Is a Major Control Risk in the Payroll

question 155

Multiple Choice

Which of the following is a major control risk in the payroll area?

• A)theft of inventory by staff
• B)fictitious persons cashing paychecks
• C)expenses being recorded as assets in order to manipulate earnings
• D)contracts being awarded to relatives of employees

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Definitions:

Marginal Tax Rates

The rate at which an additional dollar of income is taxed, demonstrating the progressive nature of income taxation.

Average Tax Rates

The ratio of the total amount of taxes paid to the total income, indicating the percentage of income that goes towards taxes.

Regressive Tax

A tax system that takes a smaller percentage of income from individuals as their income increases, often considered less fair to lower-income earners.

Payroll Taxes

Financial obligations required from both employers and employees, pegged to a fraction of the payroll expenses incurred by employers.