From an Audit Point of View, Which One of the Following

question 36

Multiple Choice

From an audit point of view, which one of the following would NOT be an important internal control in the personnel cycle?

• A) physical control over assets and records
• B) reconciliation of total payroll expense in the general ledger with the payroll tax returns and the group certificates
• C) adequate separation of duties
• D) proper authorisation of changes in pay rates

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Definitions:

Net Income

The net income of a business following the subtraction of all costs and taxes from its gross earnings.

Income Distribution

The allocation of a company's net income among shareholders in the form of dividends and retained earnings within the company.

Capital Balance

Represents the amount of capital contributed by investors or owners, plus retained earnings minus any distributions or withdrawals.

Interest

The cost paid for borrowing money, typically expressed as a percentage rate over the period of borrowing.