Question 1

Imprest accounts usually carry a significant balance.

Accepted Answer

A) True 
 B)False

Question 2

Once the auditor determines that the company's policy for accruing wages is consistent with prior years, the appropriate audit procedure to test for accuracy and cutoff is:

Accepted Answer

A) recalculating the client's accrual. 
B) performing extensive tests of controls. 
C) performing extensive tests of details. 
D) none of the above. 
A) recalculating the client's accrual. 
B) performing extensive tests of controls. 
C) performing extensive tests of details. 
D) none of the above.

Question 3

Verifying that an adequate chart of accounts is used is a key internal control for the transaction-related objective of:

Accepted Answer

A) classification. 
B) accuracy. 
C) existence. 
D) occurrence. 
A) classification. 
B) accuracy. 
C) existence. 
D) occurrence.

Question 4

When labor is a material factor in inventory valuation, the auditor should place special emphasis on testing the internal controls concerning:

Accepted Answer

A) fictitious employees. 
B) authorization of wage rates. 
C) proper classification of payroll transactions. 
D) completeness of recorded transactions. 
A) fictitious employees. 
B) authorization of wage rates. 
C) proper classification of payroll transactions. 
D) completeness of recorded transactions.

Question 5

Which of the following best describes the systems of internal control for payroll for large companies?

Accepted Answer

A) Loosely structured but well controlled 
B) Loosely structured and loosely controlled 
C) Highly structured and well controlled 
D) Highly structured but loosely controlled 
A) Loosely structured but well controlled 
B) Loosely structured and loosely controlled 
C) Highly structured and well controlled 
D) Highly structured but loosely controlled

Question 6

To minimize the opportunity for fraud, unclaimed salary checks should be:

Accepted Answer

A) redeposited. 
B) kept in the payroll department. 
C) left with the employee's supervisor. 
D) held for the employee in the personnel department. 
A) redeposited. 
B) kept in the payroll department. 
C) left with the employee's supervisor. 
D) held for the employee in the personnel department.

Question 7

________ is not a transaction-related audit objective for the classes of transactions underlying the payroll cycle.

Accepted Answer

A) Classification 
B) Existence 
C) Timing 
D) Completeness 
A) Classification 
B) Existence 
C) Timing 
D) Completeness

Question 8

Which of the following statements about the payroll and personnel cycle is correct?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 9

When performing the tests of details of balances for expense accounts, ________ is (are)generally not necessary.

Accepted Answer

A) extensive additional testing 
B) analytical procedures 
C) tests of controls 
D) substantive tests of transactions 
A) extensive additional testing 
B) analytical procedures 
C) tests of controls 
D) substantive tests of transactions

Question 10

Examining payroll records for an indication of authorization is part of the timing transaction-related audit objective.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is a substantive test of transactions?

Accepted Answer

A) Review personnel policies. 
B) Account for a sequence of payroll checks. 
C) Reconcile the disbursements in the payroll journal with the disbursements on the payroll bank statement. 
D) Examine printouts of transactions rejected by the computer as having invalid employee IDs. 
A) Review personnel policies. 
B) Account for a sequence of payroll checks. 
C) Reconcile the disbursements in the payroll journal with the disbursements on the payroll bank statement. 
D) Examine printouts of transactions rejected by the computer as having invalid employee IDs.

Question 12

An auditor is verifying that the recorded payroll payments are for work actually performed by existing employees, the occurrence transaction-related audit objective.List three key internal controls that a company should have in place in this area.

Accepted Answer

•Time records are approved by the superv

Question 13

Firing personnel terminates the payroll and personnel cycle.

Accepted Answer

A) True 
 B)False

Imprest accounts usually carry a significant balance.

Once the auditor determines that the company's policy for accruing wages is consistent with prior years, the appropriate audit procedure to test for accuracy and cutoff is:

Verifying that an adequate chart of accounts is used is a key internal control for the transaction-related objective of:

When labor is a material factor in inventory valuation, the auditor should place special emphasis on testing the internal controls concerning:

Which of the following best describes the systems of internal control for payroll for large companies?

To minimize the opportunity for fraud, unclaimed salary checks should be:

________ is not a transaction-related audit objective for the classes of transactions underlying the payroll cycle.

Which of the following statements about the payroll and personnel cycle is correct?

When performing the tests of details of balances for expense accounts, ________ is (are)generally not necessary.

Examining payroll records for an indication of authorization is part of the timing transaction-related audit objective.

Which of the following is a substantive test of transactions?

An auditor is verifying that the recorded payroll payments are for work actually performed by existing employees, the occurrence transaction-related audit objective.List three key internal controls that a company should have in place in this area.

Firing personnel terminates the payroll and personnel cycle.

The Demand for Audit and Other Assurance Services

The Cpa Profession

Audit Reports

Professional Ethics

Legal Liability

Audit Responsibilities and Objectives

Audit Evidence

Audit Planning and Analytical Procedures

Materiality and Risk

Internal Control, Control Risk, and Section 404 Audits

Fraud Auditing

The Impact of Information Technology on the Audit Process

Overall Audit Strategy and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

Completing the Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling for Tests of Details of Balances

Audit of the Acquisition and Payment Cycle: Tests of Controls, Substantive Tests of Transactions, and Accounts Payable

Completing the Tests in the Acquisition and Payment Cycle: Verification of Selected Accounts

Audit of the Inventory and Warehousing Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Completing the Audit

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

Filters

Exam 20: Audit of the Payroll and Personnel Cycle

Imprest accounts usually carry a significant balance.

Once the auditor determines that the company's policy for accruing wages is consistent with prior years, the appropriate audit procedure to test for accuracy and cutoff is:

Verifying that an adequate chart of accounts is used is a key internal control for the transaction-related objective of:

When labor is a material factor in inventory valuation, the auditor should place special emphasis on testing the internal controls concerning:

Which of the following best describes the systems of internal control for payroll for large companies?

To minimize the opportunity for fraud, unclaimed salary checks should be:

________ is not a transaction-related audit objective for the classes of transactions underlying the payroll cycle.

Which of the following statements about the payroll and personnel cycle is correct?

When performing the tests of details of balances for expense accounts, ________ is (are)generally not necessary.

Examining payroll records for an indication of authorization is part of the timing transaction-related audit objective.

Which of the following is a substantive test of transactions?

An auditor is verifying that the recorded payroll payments are for work actually performed by existing employees, the occurrence transaction-related audit objective.List three key internal controls that a company should have in place in this area.

Firing personnel terminates the payroll and personnel cycle.

The Demand for Audit and Other Assurance Services

The Cpa Profession

Audit Reports

Professional Ethics

Legal Liability

Audit Responsibilities and Objectives

Audit Evidence

Audit Planning and Analytical Procedures

Materiality and Risk

Internal Control, Control Risk, and Section 404 Audits

Fraud Auditing

The Impact of Information Technology on the Audit Process

Overall Audit Strategy and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

Completing the Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling for Tests of Details of Balances

Audit of the Acquisition and Payment Cycle: Tests of Controls, Substantive Tests of Transactions, and Accounts Payable

Completing the Tests in the Acquisition and Payment Cycle: Verification of Selected Accounts

Audit of the Inventory and Warehousing Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Completing the Audit

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

Filters