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
Recalculating a sample of payroll checks based on authorized pay rates and hours worked.
Recalculation is the specific audit procedure used to verify the mathematical accuracy of recorded amounts.
Common mistakes
Confusing Accuracy with Existence.
Practice the full CPA AUD Practice Exam 4
78 questions · hints · full answers · grading
More questions from this exam
Q01A CPA firm is performing an audit of a nonissuer, TechInnovate Inc. The engagement partner's spou...HardQ02An auditor is performing an audit of an issuer, Global Corp, in accordance with PCAOB standards. ...HardQ03A CPA is performing an audit of a county government entity that receives federal financial assist...HardQ04During the audit of an employee benefit plan subject to ERISA, the auditor discovers that the pla...HardQ05An auditor is evaluating the 'integrity' principle of the AICPA Code of Professional Conduct. Whi...Medium