ExpertMedium1 markMultiple Choice
CPA · Question 53 · Area I: Information Systems
An auditor is reviewing the 'Segregation of Duties' (SoD) in the payroll process. Which two roles should be separated?
An auditor is reviewing the 'Segregation of Duties' (SoD) in the payroll process. Which two roles should be separated?
Answer options:
A.
Authorizing time cards and Distributing paychecks.
B.
Hiring employees and Training employees.
C.
Reviewing payroll reports and Reconciling the bank account.
D.
Updating employee addresses and Updating employee tax withholdings.
How to approach this question
Look for Authorization vs Custody (Asset handling).
Full Answer
A.Authorizing time cards and Distributing paychecks.✓ Correct
A
Segregation of Duties seeks to separate Authorization (approving time), Recording (preparing payroll), and Custody (distributing checks). Combining Authorization and Custody allows for fraud (e.g., ghost employees).
Common mistakes
Separating two compatible administrative tasks.
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