An Auditor Is Scheduled to Audit Payroll Controls for a Company

question 294

Multiple Choice

An auditor is scheduled to audit payroll controls for a company which has recently outsourced its processing to an information service bureau. What action should the auditor take, considering the outsourcing decision?

• A) Review the controls over payroll in both the company and the service bureau.
• B) Review only the company's controls over data sent to and received from the service bureau.
• C) Review only the controls over payments to the service bureau based on the contract.
• D) Cancel the engagement because the processing is being performed outside of the organization.