Once the auditor has determined the company's policy for accruing wages and knows it is consistent with that of previous years,the appropriate audit procedure to test for cutoff and accuracy is to
A)recalculate the client's accruals.
B)compare the ledger balance with the journal and the T4 form.
C)confirm the amount with employees.
D)compare the recorded accrued wages with the amount approved in the minutes of the Board.

Question

Quizplus · Accepted Answer

Recalculating the client's accruals is the appropriate audit procedure to test for cutoff and accuracy because it allows the auditor to verify that the accruals have been calculated correctly according to the company's policy and are accurately reflected in the financial statements.

Once the Auditor Has Determined the Company's Policy for Accruing