Which of the Following Is the Best Reason Why an Auditor

question 35

Multiple Choice

Which of the following is the best reason why an auditor should consider observing a client's distribution of regular payroll checks?

• A) To ensure that names on the company payroll are those of bona fide employees presently on the job.
• B) Total payroll costs are a significant part of total operating costs.
• C) The auditor did not observe the distribution of the entire regular payroll during the audit in the prior year.
• D) Employee turnover is excessive.

---

Definitions:

More Expensive

Refers to items or services that have a higher cost or price in comparison to others.

Budget Constraint

The cap on the various combinations of goods and services a consumer is capable of purchasing, dictated by their earnings and the costs of these products and services.

Shirts

Clothing items designed to cover the torso, typically with sleeves and a collar.

Marginal Utility

The gain in satisfaction or benefit from consuming one additional unit of a good or service.