In testing the payroll of a large company,the auditor wants to establish that the individuals included in a sample actually were employees of the company during the period under review.What will be the best source to determine this?
A) Telephone contacts with the employees.
B) Tracing from the payroll register to the employee's earnings records.
C) Confirmation with the union or other independent organization.
D) Examination of Human Resource Department records.
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Question

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Examination of Human Resource Department records would be the best source to determine if the individuals included in the sample were actually employees of the company during the period under review. The Human Resource Department maintains employment records that would indicate if a person was an employee during the relevant period. Telephone contacts with employees may not be sufficient as individuals could have left the company or not be available to confirm. Tracing from the payroll register to the employee's earnings record may confirm payment but not employment status. Confirmation with the union or other independent organization may not be relevant if the employees in the sample are not union members or covered by such an organization.

In Testing the Payroll of a Large Company,the Auditor Wants