Which of the following audit procedures would be most useful in testing the cut-off audit objective for payroll-related liabilities?
A) Review documentation for proper classification between long and short term liabilities.
B) Compare the clients accrual of payroll liabilities with the payroll tax return.
C) Examine payment tax returns to determine that the expense was recorded in the correct period.
D) Examine subsequent cash disbursements to determine when the liabilities for payroll were paid.

Question

Quizplus · Accepted Answer

Examining payment tax returns would be the most useful audit procedure for testing the cut-off objective for payroll-related liabilities. This would ensure that the expense was recorded in the correct period, which is essential for proper cut-off. Reviewing documentation for proper classification between long and short-term liabilities (Option A) would be useful but not directly related to the cut-off objective. Comparing the client's accrual of payroll liabilities with the payroll tax return (Option B) would test the completeness objective, not the cut-off objective. Examining subsequent cash disbursements (Option D) would test the occurrence objective, not the cut-off objective.

Which of the Following Audit Procedures Would Be Most Useful