An Auditor Most Likely Would Assess Control Risk at High

question 44

Multiple Choice

An auditor most likely would assess control risk at high if the payroll department supervisor is responsible for

• A) examining authorization forms for new employees.
• B) comparing payroll registers with original batch transmittal data.
• C) authorizing payroll rate changes for all employees.
• D) hiring all subordinate payroll department employees.
• AICPA: BB Industry
• AICPA: FN Risk Analysis
• Accessibility: Keyboard Navigation

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Definitions:

Cost of Equity

The cost of equity is the return that a company is expected to pay to its shareholders for their investment in the company's equity.

Flotation Costs

Expenses incurred by a company when it issues new securities, including fees to underwriters, legal fees, and registration fees.

WACC

The Weighted Average Cost of Capital (WACC) is a calculation of a firm's cost of capital, where each category of capital is proportionately weighted.

Tax Rates

The percentage at which an individual or corporation is taxed, which can vary based on the taxable amount or income.