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Question 86 - IIA-CIA-Part2 discussion

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According to IIA guidance, which of the following procedures would be least effective in managing the risk of payroll fraud?

A.
The employee's name listed on organization's payroll is compared to the personnel records.
Answers
A.
The employee's name listed on organization's payroll is compared to the personnel records.
B.
Payroll time sheets are reviewed and approved by the timekeeper before processing.
Answers
B.
Payroll time sheets are reviewed and approved by the timekeeper before processing.
C.
Employee access to the payroll database is deactivated immediately upon termination.
Answers
C.
Employee access to the payroll database is deactivated immediately upon termination.
D.
Changes to payroll are validated by the personnel department before being processed.
Answers
D.
Changes to payroll are validated by the personnel department before being processed.
Suggested answer: B

Explanation:

According to the IIA guidance, reviewing and approving payroll timesheets by the timekeeper before processing is considered least effective in managing the risk of payroll fraud. While this procedure might detect some errors or irregularities, it does not provide a robust control against fraud because the timekeeper can collude with employees or fail to review timesheets adequately. On the other hand, procedures such as comparing payroll lists to personnel records, deactivating payroll database access upon termination, and validating changes to payroll by the personnel department involve checks and balances that are more effective at preventing or detecting fraudulent activities.

IIA Practice Guide: Managing the Business Risk of Fraud: A Practical Guide

IIA Standards and Guidance: IPPF -- Practice Guide

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asked 18/09/2024
Daniel Ramos
34 questions
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