Exam 21: Audit of the Payroll and Personnel Cycle

The usual audit test for a public company's officer compensation is to obtain the authorized salary of each officer from the minutes of the board of directors and compare it with:

Once the auditor determines that the company's policy for accruing wages is consistent with prior years,the appropriate audit procedure to test for accuracy and cutoff is:

How do auditors commonly verify sales commission expense?

What are the two major balance-related audit objectives in testing payroll liabilities?

Which of the following types of audit procedures is ordinarily emphasized the least when auditing payroll?

There is inherent risk of payroll fraud because most transactions involve:

The most important means of verifying account balances in the payroll and personnel cycle are:

In audits of companies in which payroll is a significant portion of inventory,the improper account classification of payroll can:

A weak internal control system allows a department supervisor to "clock in" for a fictitious employee and then approve the employee's time card at the end of the pay period.This fraud would be detected if other controls were in place,such as having an independent party:

The job time ticket indicates the starting and stopping times of work during the pay period.

As a part of the auditor's responsibility for ________,the auditor should review the preparation of at least one of each type of payroll tax form the client is responsible for filing.

Which of the following is a substantive test of transactions?

The computer file used for recording payroll transactions for each employee and maintaining total wages paid for the year to date is the:

Which of the following best describes the systems of internal control for payroll for large companies?

If an audit client is a public company,the understanding of internal control must be sufficient to identify opportunities to increase audit effectiveness.

Verification of the legitimacy of year-end unpaid bonuses to officers and employees can be accomplished by comparing the recorded accrual to the amount:

What events initiate and terminate the payroll and personnel cycle?

When the auditor compares the cancelled check or direct deposit with the payroll journal for amount,they are concerned with the transaction-related audit objective of:

What key separation of duties should the auditor expect to find within the payroll and personnel cycle?

The total of the individual employee earnings in the payroll master file should equal the total: