An Auditor Most Likely Would Extend Substantive Tests of Payroll

question 30

Multiple Choice

An auditor most likely would extend substantive tests of payroll when

• A) Payroll is extensively audited by the state government.
• B) Payroll expense is substantially higher than in the prior year due to company growth.
• C) Overpayments are discovered in performing tests of details.
• D) Employees complain to management about too much overtime.

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Definitions:

Processed Further

A strategic decision in manufacturing pertaining to the continuation of additional operations or processing on a product to enhance its value.

Financial Advantage

The benefit of having a stronger financial position or undertaking actions that result in financial gain, such as cost savings or increased revenue.

Cane Juice

A liquid extracted from sugarcane, often used as a sweetener or drink.

Molasses

A thick, dark syrup that is a byproduct of sugar refining, used in baking, as a sweetener, or in the fermentation of alcohol.