ExpertHard1 markMultiple Choice
CPA · Question 59 · Area III: Procedures
An auditor is testing the 'Accuracy' assertion for payroll expense. Which procedure is most relevant?
An auditor is testing the 'Accuracy' assertion for payroll expense. Which procedure is most relevant?
Answer options:
A.
Tracing a sample of time cards to the payroll register.
B.
Vouching a sample of payroll register entries to time cards.
C.
Recalculating a sample of payroll checks based on authorized pay rates and hours worked.
D.
Observing the distribution of paychecks.
How to approach this question
Accuracy = Math. Look for 'Recalculation'.
Full Answer
C.Recalculating a sample of payroll checks based on authorized pay rates and hours worked.✓ Correct
The Accuracy assertion concerns whether amounts have been recorded appropriately. Recalculating the payroll (Hours x Rate - Deductions) directly tests the mathematical accuracy of the expense.
Common mistakes
Confusing Accuracy (Math) with Occurrence (Did they work?).
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