When examining payroll transactions, an auditor is primarily concerned with the possibility of:
A) posting of gross payroll amounts to incorrect salary expense accounts.
B) misfootings of employee time records.
C) excess withholding of amounts required to be withheld.
D) overpayments and unauthorised payments.

Question

Quizplus · Accepted Answer

The primary concern of an auditor when examining payroll transactions is the possibility of overpayments and unauthorised payments. This includes checking for accuracy and validity of employee information, verifying that payroll taxes and deductions are correctly calculated and withheld, and ensuring that all payments are in accordance with company policies and procedures. Mispostings of gross payroll amounts, misfootings of time records, and excess withholding of amounts required to be withheld are also important areas to review, but they are not the primary concern when examining payroll transactions.

When Examining Payroll Transactions, an Auditor Is Primarily Concerned with the Possibility