A company uses a bank to process its weekly payroll. Time
sheets and payroll adjustment forms (e.g., hourly rate
changes, terminations) are completed and delivered to the
bank, which prepares checks (cheques) and reports for
distribution. To BEST ensure payroll data accuracy:
A. payroll reports should be compared to input forms.
B. gross payroll should be recalculated manually.
C. checks (cheques) should be compared to input forms.
D. checks (cheques) should be reconciled with output reports.
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Answer: A
The best way to confirm data accuracy, when input is
provided by the company and output is generated by the bank,
is to verify the data input (input forms) with the results
of the input (payroll reports). Hence, comparing payroll
reports with input forms is the best mechanism of verifying
data accuracy. Recalculating gross payroll manually would
only verify whether the processing is correct and not the
data accuracy of inputs. Comparing checks to input forms is
not feasible as checks have the processed information and
input forms have the input data. Reconciling checks with
output reports only confirms that checks have been issued as
per output reports.
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