In Auditing Payroll, Which of the Following Procedures Will Normally

question 58

Multiple Choice

In auditing payroll, which of the following procedures will normally require the least amount of auditor time under normal circumstances?

• A)Tests of controls
• B)Substantive tests of transactions
• C)Analytical procedures
• D)Tests of details of balances

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Definitions:

Conversion Costs

The combined costs of direct labor and manufacturing overhead that are incurred to convert raw materials into finished goods.

Materials Costs

Expenses associated with the raw materials used in the manufacture of products.

Assembly Department

A specialized section within a manufacturing facility where components are assembled into final products.

Step-Down Method

A cost allocation method used in accounting to allocate overhead costs to various cost objects, starting with the department incurring the highest costs.