An auditor most likely would extend substantive tests of payroll when
A)Payroll is extensively audited by the state government.
B)Payroll expense is substantially higher than in the prior year.
C)Overpayments are discovered in performing tests of controls.
D)Employees complain to management about too much overtime.

Question

Quizplus · Accepted Answer

Overpayments being discovered during tests of controls may indicate a weakness in the payroll system, prompting the auditor to extend substantive tests to ensure the accuracy of the payroll. The other options do not necessarily indicate a need to extend substantive tests of payroll.

An Auditor Most Likely Would Extend Substantive Tests of Payroll