Which of the following practices is a strong internal control procedure?

Which of the following practices is a strong internal control procedure?

• A. Have the payroll bank account reconciled in the payroll department
• B. Have the payroll manager distribute paychecks
• C. Place payroll checks under the personal control of the payroll manager
• D. Have a person other than the person who requested and authorized the payments prepare the payroll checks

Answer: (C)

Placing payroll checks under the personal control of the payroll manager concentrates custody of cash with a single, accountable person. This creates a clear point of responsibility: the manager can verify each check against the payroll records before release, ensuring that only authorized payments are issued and making any discrepancy easier to trace. Keeping the checks under one trusted custodian reduces the risk of misappropriation that can occur when multiple people handle or distribute checks, and it supports timely, auditable distribution to employees. The other options weaken controls by reducing independence (reconciling the bank account within payroll), mixing duties (the manager handling both authorization and distribution), or allowing someone to prepare checks who did not authorize them, which can obscure improper payments.

Placing payroll checks under the personal control of the payroll manager concentrates custody of cash with a single, accountable person. This creates a clear point of responsibility: the manager can verify each check against the payroll records before release, ensuring that only authorized payments are issued and making any discrepancy easier to trace. Keeping the checks under one trusted custodian reduces the risk of misappropriation that can occur when multiple people handle or distribute checks, and it supports timely, auditable distribution to employees. The other options weaken controls by reducing independence (reconciling the bank account within payroll), mixing duties (the manager handling both authorization and distribution), or allowing someone to prepare checks who did not authorize them, which can obscure improper payments.