Which of the Following Conclusions Would Be Appropriate for a Beginning

question 163

Multiple Choice

Which of the following conclusions would be appropriate for a beginning auditor performing an audit of a payroll department?

• A) Employee taxes have been deducted at the correct rates, and the taxes have been forwarded to the appropriate government agency.
• B) Although there is insufficient segregation of duties, the impact is mitigated by compensating controls.
• C) The payroll computer system should be replaced.
• D) The payroll department staff has the appropriate level of skills.

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Definitions:

U.S. Large-Cap Index

A stock market index that measures the performance of large capitalization stocks in the United States.

Profitability

The degree to which a company or activity yields profit or financial gain, often measured over a specific period.

NAFTA

The North American Free Trade Agreement, a treaty among the United States, Canada, and Mexico to lower trade barriers and promote economic cooperation.

International Trade Agreement

Treaties between two or more nations that outline the rules and guidelines for trade, including tariffs, quotas, and other trade restrictions.