Association of Chartered Certified Accountants (ACCA) Certification Practice Test

In payroll management, which process follows obtaining evidence for payments?

1. Documentation storage

2. Authorisation of the payment

3. Payment execution

4. Employee notification

The correct answer is: Authorisation of the payment

The process that comes after obtaining evidence for payments in payroll management is the authorization of the payment. Before executing any payment, it is essential to have all the necessary approvals in place. This step ensures compliance with internal controls and financial policies, preventing unauthorized transactions and potential fraud. After evidence is gathered, which may include timesheets, contracts, or performance metrics, the next logical step is to seek the required authorization from designated individuals or departments. This ensures that all expenses are legitimate and accounted for, demonstrating a structured approach to payroll management and safeguarding the organization's financial assets. Once the payment is authorized, the subsequent steps, such as payment execution and documentation storage, can take place. Employee notification typically occurs after the payment has been executed to inform staff of their pay status. Therefore, authorization of the payment is crucial to the integrity and reliability of the payroll process.