ExpertEasy1 markMultiple Choice
CPA · Question 76 · Area III: Performing Procedures
An auditor is testing the 'Accuracy' of the payroll expense. Which of the following procedures is MOST appropriate?
An auditor is testing the 'Accuracy' of the payroll expense. Which of the following procedures is MOST appropriate?
Answer options:
A.
Observing the distribution of paychecks.
B.
Tracing time cards to the payroll register.
C.
Recalculating a sample of payroll checks based on authorized pay rates and hours worked.
D.
Comparing total payroll to the budget.
How to approach this question
Accuracy = Math. Look for 'Recalculate'.
Full Answer
C.Recalculating a sample of payroll checks based on authorized pay rates and hours worked.✓ Correct
Recalculation is the specific audit procedure used to verify the mathematical accuracy of recorded amounts.
Common mistakes
Confusing Accuracy with Existence.
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