An auditor is testing the 'Accuracy' assertion for payroll expense. Which procedure is most relevant?

Answer options:

Tracing a sample of time cards to the payroll register.

Vouching a sample of payroll register entries to time cards.

Recalculating a sample of payroll checks based on authorized pay rates and hours worked.

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

Recalculating a sample of payroll checks based on authorized pay rates and hours worked.

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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