Which of the following audit procedures would be the most effective in testing for nonexistent employees?
A) Trace transactions recorded in the payroll journal to the HR department to determine employment status.
B) Examine cancelled checks for proper endorsement.
C) Recalculate net pay .
D) Reconcile the disbursements in the payroll journal with the disbursements on the payroll bank statements.

Question

Quizplus · Accepted Answer

Tracing transactions recorded in the payroll journal to the HR department would help determine whether the employees listed in the journal are actually employed by the company. This is a more effective procedure than examining cancelled checks, recalculating net pay, or reconciling disbursements, which may not reveal whether a listed employee is nonexistent.

Which of the Following Audit Procedures Would Be the Most