Suppose an auditor is preparing for an audit of the payroll process of an entity and has identified that the entity is labor-intensive and depends largely on hourly compensation.The auditor still needs to understand all of the following about the entity, EXCEPT _______.
A)The capital intensiveness of the entity
B)The importance of bonuses or other compensation arrangements
C)The level of variability of pay throughout the period
D)None of the answer choices are correct.

Question

Quizplus · Accepted Answer

The capital intensiveness of the entity is not relevant to the audit of the payroll process as it does not directly impact the hourly compensation of employees. The importance of bonuses or other compensation arrangements, as well as the level of variability of pay throughout the period, are important factors to consider in the audit of the payroll process.

Suppose an Auditor Is Preparing for an Audit of the Payroll