An Auditor Reviews a Client's Payroll Procedures

question 44

Multiple Choice

An auditor reviews a client's payroll procedures.The auditor would consider the internal control to be less than effective if a payroll department supervisor was assigned the responsibility for:

• A)reviewing and approving time reports for subordinate employees.
• B)distributing payroll cheques to employees.
• C)hiring subordinate employees.
• D)initiating requests for salary adjustments for subordinate employees.

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Definitions:

Average Variable Cost (AVC)

Variable cost divided by output.

Average Total Cost

The total cost of production divided by the quantity produced, indicating the average cost per unit of output.

Average Variable Cost

Average variable cost (AVC) refers to the total variable costs per unit of output, covering expenses that change with the level of production, such as materials and labor.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, resulting in a stable market condition.