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ACCA Applied Knowledge · Business and Technology · The impact of advances in technology

A firm is considering automating its payroll process. Which of the following is the most significant risk that management should address specifically because the process is automated?

The key automation-specific risk is that an error in the programmed rules or master data is applied consistently to every employee before anyone notices. Manual systems tend to produce isolated errors. Testing changes, exception reports and management review are therefore needed to control the automated process.

  1. AAn error in the programmed rules could be repeated across every employee's pay before it is detectedCorrect
  2. BEmployees may be paid on the last working day of the month
  3. CPayroll data will need to be recorded for tax purposes

Explanation

Automated systems apply programmed logic consistently, so a flaw in a rule or master data is replicated at scale and may go unnoticed without review. Paying on the last working day and keeping tax records apply equally to manual systems, so they are not risks specific to automation.

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