Which of the Following Procedures Would Normally Be Performed by the Auditor

question 58

Multiple Choice

Which of the following procedures would normally be performed by the auditor when conducting tests of payroll transactions?

• A)Interview employees selected in a statistical sample of payroll transactions.
• B)Trace a sample of payroll checks to the master employee list.
• C)Confirm amounts withheld from employees' salaries with proper governmental authorities.
• D)Examine signatures on paid salary checks.

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Definitions:

Entity Method

An approach to accounting and financial reporting that sees the company as separate from its owners, focusing on the company's transactions and financial state.

Carrying Value

The net amount at which an asset or liability is valued on the balance sheet, considering factors such as original cost, accumulated depreciation, and impairment losses.

Fair Value

Fair value is the estimated price at which an asset or liability could be exchanged between knowledgeable, willing parties in an arm's length transaction.

Goodwill

The excess amount paid over the fair value of the net assets of a company during an acquisition, representing intangible assets like brand reputation or customer loyalty.