Auditing Chapter 12 and 13 Quizzes

Auditing Chapter 12 and 13 Quizzes - Marks: 1 The purpose...

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Marks: 1 The purpose of segregating the duties of distributing payroll checks and hiring personnel is to separate the Choose one answer. a. Duties within the accounting function b. Custody of assets from the accounting for those assets c. Authorization of transactions from the custody of related assets d. Operational responsibility from record keeping responsibility Correct Marks for this submission: 1/1. Question 2 Marks: 1 Which of the following could test the assertion of cutoff for payroll-related liabilities? Choose one answer. a. Compare items in accrued payroll taxes to the supporting payroll tax return b. Search for unrecorded liabilities c. Examine payroll tax returns to determine that the expense was recorded in the proper period d. Review payroll liabilities for proper classification as short or long-term Incorrect Marks for this submission: 0/1. Question 3 Marks: 1 During the current year being audited, Hitech, Inc. changed from a conventional payroll punch clock to a computerized payroll time system. Factory employees now record time in and out with magnetic cards and the IT system automatically updates all payroll records. Because of this change Choose one answer. a. The auditor must audit through the computer b. Internal control has improved c. Without paper clock cards, part of the audit trail has been altered d. The potential for payroll related fraud has been diminished Correct Marks for this submission: 1/1. Question 4 Marks: 1 The payroll-processing function is responsible for paying employees for services and benefits. Answer: True False
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Incorrect Marks for this submission: 0/1. Question 5 Marks: 1 If the results of the control tests do not support the planned level of control risk, the detection risk will have to be set higher. Answer: True False Correct Marks for this submission: 1/1. Question 6 Marks: 1 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 Choose one answer. 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 Correct Marks for this submission: 1/1. Question 7 Marks: 1 Tracing a sample of time cards before and after period end to the weekly payroll report and tracing the weekly payroll report to the general ledger to verify payroll transactions are recorded in the proper period would gather evidence primarily for which assertion: Choose one answer. a. Classification.
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This note was uploaded on 05/06/2011 for the course AUDITING 4505 taught by Professor Messier during the Spring '11 term at University of Minnesota Duluth.

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Auditing Chapter 12 and 13 Quizzes - Marks: 1 The purpose...

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