Question

management is concerned with the potential for unauthorized changes to the payroll. which of the following is the proper organizational structure to prevent such unauthorized changes?
a. the payroll department maintaining and authorizing all changes to the personnel records.
b. the payroll department being supervised by the management of the human resources division.
c. limiting the payroll department’s functions to maintaining the payroll records, distributing paychecks, and posting the payroll entries to the general ledger.
d. the personnel department authorizing the hiring and pay levels of all employees.
explanation
(choice a) incorrect. the personnel department should be responsible for maintaining and authorizing all changes to personnel records.
(choice b) incorrect. the payroll and personnel departments should be independent; neither should supervise the other.
(choice c) incorrect. the payroll department functions should not include the posting of the payroll entries to the general ledger—this is the responsibility of the accounting department.
(choice d) correct. this ideally describes the organizational structure and the functions and responsibilities of each department, which should help eliminate any potential unauthorized changes to payroll.

Explanation:

To determine the proper organizational structure to prevent unauthorized payroll changes, we analyze each option:

• Option A: The payroll department should not authorize personnel record changes (that's the personnel department's role), so A is incorrect.
• Option B: Payroll and human resources (personnel) should be independent; one shouldn't supervise the other, so B is incorrect.
• Option C: Posting payroll entries to the general ledger is the accounting department's responsibility, not payroll's, so C is incorrect.
• Option D: The personnel department authorizing hiring and pay levels separates authorization from payroll processing, reducing unauthorized change risks. This matches proper segregation of duties.

Answer:

D. The personnel department authorizing the hiring and pay levels of all employees.