Question

For proper internal control, the person(s) responsible for signing the payroll checks should not have access to timekeeping or be otherwise involved in the preparation of payroll. True or False?

1) True
2) False

Answer 1

False. It is important to separate the tasks of signing payroll checks and timekeeping for proper internal control.

Step-by-step explanation:

False. For proper internal control, it is important that the person(s) responsible for signing payroll checks do not have access to timekeeping or be involved in the preparation of payroll. This helps to ensure the separation of duties and prevents potential fraud or errors.

By separating the tasks of timekeeping and payroll preparation, it reduces the risk of someone manipulating the payroll process for personal gain. For example, if the person responsible for signing payroll checks also has access to timekeeping, they could easily manipulate the time records to increase their own salary without detection.

Therefore, it is vital to designate separate roles and responsibilities within the organization to maintain effective internal control over payroll processes and to minimize the risk of fraud.