When Examining Payroll Transactions, an Auditor Is Primarily Concerned with the Possibility

question 128

Multiple Choice

When examining payroll transactions, an auditor is primarily concerned with the possibility of

• A) incorrect summaries of employee time records.
• B) overpayments and unauthorized payments.
• C) under withholding of amounts required to be withheld.
• D) posting of gross payroll amounts to incorrect salary expense accounts.

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Definitions:

Budgeted Income Statement

A financial projection that estimates a company's revenue and expenses over a specific future period, predicting net income or loss.

Budgeted Balance Sheet

A financial statement projecting the future financial position of a company, based on expected assets, liabilities, and equity.

Continuous Budget

A 12-month budget that rolls forward one month as the current month is completed.

Rolls Forward

A process in accounting or financial planning where data or balances are brought forward from a previous period to the current one.