Which of the Following Procedures Would Normally Be Performed by the Auditor

question 7

Multiple Choice

Which of the following procedures would normally be performed by the auditor when conducting tests of payroll transactions?

• A) Interview employees selected in a statistical sample of payroll transactions.
• B) Vouch number of hours worked as shown on payroll to time cards and time reports signed by the foreman.
• C) Confirm amounts withheld from employees' salaries with proper governmental authorities.
• D) Examine signatures on paid salary checks.

---

Definitions:

Bankruptcy Costs

Expenses associated with the process of declaring bankruptcy, including legal, administrative, and direct costs.

Modigliani

Franco Modigliani, an economist known for his work in corporate finance, especially the Modigliani-Miller theorem regarding capital structure and the dividend irrelevance theory.

Miller

Often refers to a person who operates a mill, a machine to grind a cereal crop to make flour.

Risk

The exposure to potential financial loss or gain, often evaluated in decisions involving investment or finance.