Comprehensive and Detailed Explanation:
Payroll Standard Operating Procedures (SOPs) must be regularly updated to maintain compliance and accuracy.
Best practice is to update SOPs whenever workflows change (Option C).
Option A (Annually) is incorrect because waiting a full year could lead to outdated procedures.
Option B (Quarterly) is incorrect unless payroll processes are highly dynamic.
Option D (When management changes) is incorrect because processes may change independently of leadership changes.
Reference:
Payroll.org - Payroll Policies and Procedures Best Practices
IRS - Payroll Compliance Guidelines