Which of the Following Is the Best Way for an Auditor

question 32

Multiple Choice

Which of the following is the best way for an auditor to determine that every name on a company's payroll is that of a bona fide employee presently on the job?

• A)Examine personnel records for accuracy and completeness.
• B)Examine employees' names listed on payroll accounting records.
• C)Make a surprise observation of the company's regular distribution of paychecks.
• D)Visit the working areas and confirm with employees their badge or identification numbers.

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Definitions:

Political Considerations

These refer to the impact that politics and government policy can have on economic issues, investments, and the overall business environment.

Economic Performance Approach

An accounting method where income and expenses are recorded when the service is provided or consumed, rather than when payment is made.

Commercial and Tax Law Approach

The study of laws related to commercial transactions and taxation, focusing on how they influence business operations and financial practices.

Auditing Standards

Rules and guidelines that auditors are required to follow when conducting audits of companies’ financial statements, ensuring consistency, reliability, and integrity in the audit process.