In Auditing Payroll, an Auditor Most Likely Would

question 317

Multiple Choice

In auditing payroll, an auditor most likely would:

• A) Verify that checks representing unclaimed wages are mailed.
• B) Trace individual employee deductions to entity journal entries.
• C) Observe entity employees during a payroll distribution.
• D) Compare payroll costs with entity standards or budgets.

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Definitions:

Wages Forgone

The potential earnings that are lost or given up by choosing one alternative over another, often considered in decisions about education or training.

Implicit Costs

The opportunity costs of using resources owned by the firm for its own use, rather than selling them for a profit elsewhere.

Economic Costs

The total value of all resources used in the production of goods or services, including both explicit and implicit costs.

Opportunity Costs

The potential benefits an individual, investor, or business misses out on when choosing one alternative over another.