Explain the risks, controls and control classification that arise in the following cases.

An inadvertent data entry error caused an employee's wage rate to be overstated in the payroll master file.

A fictitious employee payroll record was added to the payroll master file.

A computer operator used an online terminal to increase her own salary.

A factory employee punched a friend's time card in at 1:00 P.M. and out at 5:00 P.M. while the friend played golf that afternoon.

Some time cards were lost during payroll preparation; consequently, when paychecks were distributed, several employees complained about not being paid.

Source: Romney, Marshall, et al. Accounting Information Systems Australasian Edition. Pearson Higher Education AU, 2012.

• (a) Identify five (5) risks present in the previously listed activities.
• (b) Recommend a control for each of the risks you identified.
• (c) Classify each of the control activities as preventive, detective, or corrective.