In Determining the Effectiveness of an Entity's Internal Controls Relating

question 1015

Multiple Choice

In determining the effectiveness of an entity's internal controls relating to the occurrence assertion for payroll transactions, an auditor most likely would inquire about and:

• A) Observe the segregation of duties concerning personnel responsibilities and payroll disbursement.
• B) Inspect evidence of accounting for prenumbered payroll checks.
• C) Recompute the payroll deductions for employee fringe benefits.
• D) Verify the preparation of the monthly payroll account bank reconciliation.

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Definitions:

Marginal Utility

The shift in happiness or benefit a person receives from using one more unit of a particular product or service.

All-you-can-eat

A service often provided by restaurants where customers can consume as much food as they want for a fixed price.

Buffet Restaurants

Restaurants that offer a variety of foods displayed on a buffet table, allowing customers to serve themselves a wide range of dishes for a fixed price.

Value Loss

The decrease in the worth or price of an asset or a commodity in the market over time.