In witnessing a payroll distribution, the auditor would not be expected to observe that:
A) segregation of duties exist between the preparation and payment of payroll.
B) the correct payroll entries are made in the firm's ledger and journal
C) there is proper control and disposal of unclaimed cheques.
D) each employee receives only one cheque or pay envelope.

Question

Quizplus · Accepted Answer

The auditor's role in witnessing a payroll distribution primarily focuses on observing the process to ensure controls are in place, such as segregation of duties, proper handling of unclaimed checks, and that employees receive only one payment. Making correct payroll entries in the firm's ledger and journal, while important, is not directly observed during the payroll distribution process; it involves subsequent verification of documentation and records.

In Witnessing a Payroll Distribution, the Auditor Would Not Be