Once the Auditor Has Determined the Company's Policy for Accruing

question 83

Multiple Choice

Once the auditor has determined the company's policy for accruing wages and knows it is consistent with that of previous years, the appropriate audit procedure to test for cutoff and accuracy is to:

• A) compare the recorded accrued wages with the amount approved in the minutes of the board.
• B) confirm the amount with employees.
• C) compare the ledger balance with the journal and the tax form.
• D) recalculate the client's accruals.

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Definitions:

Tax Revenues

Income that the government receives from taxation, which can be levied on individuals, corporations, and other legal entities.

Federal Gasoline Taxes

Taxes imposed by the federal government on the sale of gasoline.

Payroll Taxes

Government levies on employee earnings to support social insurance programs, characteristically deducted from a worker's paycheck.

Social Security

A government program designed to provide financial assistance to retirees, disabled individuals, and survivors of deceased workers, funded through payroll taxes.