In Determining the Effectiveness of an Entity's Policies and Procedures

question 49

Multiple Choice

In determining the effectiveness of an entity's policies and procedures relating to the existence or occurrence assertion for payroll transactions, an auditor most likely would inquire about and

• A) Observe the segregation of duties concerning human resource responsibilities and payroll disbursement.
• B) Inspect evidence that all prenumbered payroll checks are accounted for.
• C) Recompute the payroll deductions for employee fringe benefits.
• D) Verify the preparation of the monthly payroll account bank reconciliation.

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Definitions:

Misrepresentation Claim

A legal assertion that one party has made false statements that another party relied on to their detriment.

Stop-Payment Order

A request made to a financial institution to cancel payment on a check or payment request before it has been processed.

DVD Player

An electronic device that plays DVDs, typically allowing for the viewing of movies and other video content on a TV or monitor.

Cleverly Altered

Describes something modified in a skillful or ingenious manner.