ICAEW ARF · Chapter 6 · Question 3 of 11
Which control best ensures that PAYE income tax and National Insurance deducted from employees are correctly paid over to HM Revenue & Customs?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) A monthly reconciliation of deductions per the payroll to amounts paid to HM Revenue & Customs, reviewed by the finance manager
Explanation
Reconciling the tax and National Insurance shown on the payroll with the amounts paid each month helps ensure the liability is paid correctly and on time, and that the year-end balance owed is accurate. The other controls relate to the validity of employees, pay rates and overtime rather than payment of deductions.
More Controls over payroll, inventory and cash MCQs
- Q5During a year-end inventory count, count sheets are sequentially numbered, issued to count teams and accounted for at the end of the…
- Q6A client uses a perpetual inventory system with continuous counting instead of a full year-end count. Which of the following would be…
- Q7Which of the following controls mainly addresses the valuation of inventory, rather than its existence or completeness?
- Q8What is the main purpose of a company preparing a monthly bank reconciliation that is reviewed by someone independent of the cash book?
- Q9Which control over cash received in the post is most effective?