In auditing payroll, an auditor most likely would:

Question

Quizplus · Accepted Answer

Choice "D" is correct. The analytical procedure comparing payroll to standards or budgets is the substantive procedure most likely used for payroll. Choice "A" is incorrect. Unclaimed payroll checks should be returned to an independent individual for follow up. Choice "B" is incorrect. Individual employee deductions may be difficult to trace directly to journal entries, as companies often make a single journal entry for the sum of individual employee deductions. Comparing payroll costs to standards or budgets is a more commonly used substantive audit procedure. Choice "C" is incorrect. Observing payroll distribution is an effective procedure to detect payments to fictitious employees, but with the advent of electronic payroll distribution, it is not as likely to be performed as comparing payroll costs to standards or budgets.

In Auditing Payroll, an Auditor Most Likely Would