In determining the effectiveness of an entity's policies and procedures relating to the existence or occurrence assertion for payroll transactions, an auditor most likely would inquire about and:
A)observe the segregation of duties concerning human resource responsibilities and payroll disbursement.
B)inspect evidence that all prenumbered payroll checks are accounted for.
C)recompute the payroll deductions for employee fringe benefits.
D)verify the preparation of the monthly payroll account bank reconciliation.

Question

Quizplus · Accepted Answer

Inquiring about the segregation of duties between human resources and payroll disbursement is relevant to the existence or occurrence assertion for payroll transactions. It helps to ensure that there is proper authorization and documentation for payroll transactions, as well as preventing errors or fraud. Inspecting prenumbered payroll checks, recomputing payroll deductions, and verifying bank reconciliations are not directly related to the existence or occurrence assertion.

In Determining the Effectiveness of an Entity's Policies and Procedures