Suppose an Auditor Is Preparing for an Audit of the Payroll

Multiple Choice

Suppose an auditor is preparing for an audit of the payroll process of an entity and has identified that the entity is labor-intensive and depends largely on hourly compensation.The auditor still needs to understand all of the following about the entity, EXCEPT _______.

A) The capital intensiveness of the entity
B) The importance of bonuses or other compensation arrangements
C) The level of variability of pay throughout the period
D) None of the answer choices are correct.