The Overall Audit Objective in the Audit of the Payroll

question 116

True/False

The overall audit objective in the audit of the payroll and the personnel cycle is to evaluate whether the account balances affected by the cycle are fairly stated according to the applicable accounting standards.

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Definitions:

Post-Closing Trial Balance

A list of all account balances after the closing entries have been made, ensuring the accuracy of the ledger.

Fees Earned

Revenue recognized by a company for services provided during a specific period, even if not yet received in cash.

Real Account

Permanent accounts in accounting that are not closed at the end of the accounting period, including assets, liabilities, and equity accounts.

Nominal Account

Refers to accounts that track revenues, expenses, gains, and losses; these accounts are closed at the end of each accounting period.