Question

Which of the following controls best helps to prevent an overstatement of payroll expense?

a) Segregation of duties

b) Use of direct deposit

c) Reconciliation of time cards

d) Supervisory review

Answer 1

The best control to prevent an overstatement of payroll expense is the reconciliation of time cards.

Step-by-step explanation:

The correct answer to this question is c) Reconciliation of time cards. Reconciling time cards helps to prevent an overstatement of payroll expense by ensuring that employees' hours are accurately recorded and that only the actual hours worked are included in the payroll calculations.

Segregation of duties is an important control that helps to prevent fraud, but it does not directly address the overstatement of payroll expense. The use of direct deposit can help streamline the payroll process, but it does not specifically prevent an overstatement of payroll expense.

Supervisory review is another important control, but it may not catch all instances of an overstatement of payroll expense. Reconciliation of time cards specifically focuses on ensuring accuracy in payroll calculations and is therefore the best control to prevent an overstatement of payroll expense.