Which of the following is the best reason why an auditor should consider observing a client's distribution of regular payroll checks?
A) To ensure that names on the company payroll are those of bona fide employees presently on the job.
B) Total payroll costs are a significant part of total operating costs.
C) The auditor did not observe the distribution of the entire regular payroll during the audit in the prior year.
D) Employee turnover is excessive.

Question

Quizplus · Accepted Answer

Observing the distribution of regular payroll checks would allow the auditor to ensure that the names on the payroll are those of bona fide employees presently on the job. This would help prevent fraud and ensure that the payroll expenses are legitimate.

Which of the Following Is the Best Reason Why an Auditor