In an Audit Engagement, a Group of Internal Auditors Used

question 102

Multiple Choice

In an audit engagement, a group of internal auditors used an integrated test facility to test payroll processing. The auditors identified the key controls and processing steps in the computer software, and then developed test data. Over the course of 24 months, they submitted test transactions on a regular basis but did not find any differences between payroll processing and integrated test facility results. Based on the data, what can the auditors conclude?

• A) Payments to employees during the 24-month period were all correct.
• B) The computer application and its control procedures correctly processed payroll over the 24-month period.
• C) Employees are properly submitting their hours to payroll.
• D) The computer software is flawed.

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Definitions:

Downward-Sloping Demand

A representation of the relationship between price and quantity demanded, indicating that as price decreases, demand increases.

Reasonable Substitutes

Alternative products or services that can satisfactorily replace others, meeting the same needs or wants.

TC (Total Cost) Curve

A graphical representation that shows the total cost of production at different levels of output.