Exam 13: Production and Payroll Process

To best ensure that employees are paid authorized rates, the auditor should trace wage rates from the

In the area of payroll, which of the following procedures represents proper control over the custody of assets?

It is permissible for accounting personnel to authorize production orders since they do not have custody of the assets.

A test of the validity objective is to examine a sample of production cost reports and recalculate all costs entered.

A bill of materials is associated with which duty?

In the audit of payroll, auditors often examine the endorsements on a sample of cancelled payroll cheques.What is the purpose of this procedure?

The sampling unit in a test of controls relating to the validity of payroll transactions is ordinarily a (an)

Production accounting generates important information for management decisions but also is a source of audit risk because:

The following document is not included in the payroll cycle:

If controls over production accounting are found to be strong, an auditor can plan to do less testing at year over:

Selecting a sample of job orders from the job cost summary and matching them to bills of material and the schedule of production labour requirements is a procedure designed to test the control objective of

Only supervisors have physical custody of materials, equipment and labour while the production work is performed.

Recalculating all costs entered on a sample of open and closed job cost reports is a test of the accuracy objective.

Tracing selected items from the payroll register to approved, employee time cards provides evidence that

A payroll "clearing account" is a temporary account that holds payroll transactions until final accounting entries are prepared.

Which of the following departments is likely to approve changes in pay rates and deductions from employee salaries?

Small Corporation uses a Wages Clearing Account for its payroll disbursements.At the end of February a reasonably large debit balance remained in this account.The most likely reason for this is that

The purpose of segregating the duties of hiring personnel and distributing payroll cheques is to separate the

Most of the transactions in the production cycle are cost accounting allocations, unit cost determinations, and standard cost calculations.

Selecting a sample of time clock cards and examining them for evidence of approval by a supervisor then tracing the hours recorded to the payroll registers is a procedure designed to obtain evidence about the control objective(s) of