An Auditor Most Likely Would Perform Substantive Procedures on Payroll

question 41

Multiple Choice

An auditor most likely would perform substantive procedures on payroll transactions and balances when

• A)Cutoff tests indicate a substantial amount of accrued payroll expense.
• B)The assessed level of control risk relative to payroll transactions is low.
• C)Analytical procedures indicate unusual fluctuations in recurring payroll entries.
• D)Accrued payroll expense consists primarily of unpaid commissions.

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Definitions:

Defense Mechanism

Psychological strategies brought into play by individuals, groups, and even nations to cope with reality and to maintain a self-image by reducing the anxiety they feel when faced with stressful situations.

Projection

A defense mechanism where an individual attributes their unwanted thoughts or feelings onto someone else.

Sublimation

A defense mechanism where socially unacceptable impulses or idealizations are transformed into socially acceptable actions or behavior, often resulting in a long-term conversion of the initial impulse.

Defense Mechanism

Psychological strategies brought into play by individuals, unconsciously, to protect themselves from anxiety and to cope with reality.