The Multiple Choice Questions Blog

The following describes a process in the payroll system at Alex Manufacturing Ltd.

For the process, select whether the issue represents a strength, a deficiency, has no impact or has no material impact on the system.

• Employees are given individual security codes to punch into the main door keypad. This keypad also monitors the hours worked by employees, a sample of which is checked against data from headcounts during the day.

Select ONE answer:

1. No impact
2. Strength
3. No material Impact
4. Deficiency

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct – Process involves physical security as a control.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Alex Manufacturing Ltd employs several trainees who start every six months.

All trainees must complete a six-month probationary period before progressing to the next level of the traineeship.

The external accountant providing assurance on the efficiency of the controls’ operation has identified the following deficiency in Alex Manufacturing Ltd’s payroll system.

For the deficiency stated below, select the most likely consequence which might arise because of that deficiency.

• Many trainee employees work overtime, but there is no system for authorising the levels of overtime claimed.

Select ONE answer:

1. There is a high risk that the trainees will be paid the wrong amounts
2. The computerised payroll may contain miscalculations in the wage rate
3. There is NO impact on the efficiency of the controls
4. The impact on the controls is not material and requires no action

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Alex Manufacturing Ltd employs several trainees who start every six months.

All trainees must complete a six-month probationary period before progressing to the next level of the traineeship.

The external accountant providing assurance on the efficiency of the controls’ operation has identified the following deficiency in Alex Manufacturing Ltd’s payroll system.

For the deficiency stated below, select the most likely consequence which might arise because of that deficiency.

• Employees are not given a personnel file until they have completed their six-month probationary period.

Select ONE answer:

1. The computerised payroll may contain miscalculations in the wage rate
2. There is NO impact on the efficiency of the controls
3. The impact on the controls is not material and requires no action
4. There is a high risk that the trainees will be paid the wrong amounts

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

For the following statement below, select whether it is Unimportant, No Impact, True or False in respect of internal controls over payroll

• Changes in pay rates should be authorised by senior management.

Select ONE answer:

1. False
2. No impact
3. True
4. Unimportant

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

For the following statement below, select whether it is Unimportant, No Impact, True or False in respect of internal controls over payroll

• Reviewing wages paid against the wages budget helps ensure employees are paid the correct amounts.

Select ONE answer:

1. False
2. True
3. No impact
4. Unimportant

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.