The following are various asset misappropriations involving the payroll and personnel cycle:

1. A supervisor does not notify human resources that an hourly employee has left the company. He continues to submit time records for the employee. The money is directly deposited in the former employees bank account, and he splits the amount paid with the supervisor.
2. The payroll clerk increases his salary by $100 each pay period, and he also increases the hourly rate for his friend who works in the shipping department.
3. The payroll clerk submits payroll information for a fictitious employee and has the funds directly deposited to a bank account that he controls.
4. An employee adds 10 overtime hours that she did not work to her time record each pay period.
5. Two factory employees have an arrangement that one of them will take each Friday off, and the other employee will record their time worked so that the absent employee will be paid.

a. Indicate one or more controls that would be most effective in preventing or detecting each misappropriation.

b. Because the controller is concerned about fictitious employees, she has recommended a surprise payroll payoff.

- Which misappropriations would be detected by the surprise payroll payoff?

- How is the payoff done if employees do not receive payroll checks because payment is directly deposited into their bank accounts?