Payroll

Question 1

When is the detailed testing of payroll (or other expense accounts) typically performed?

Answer 1

Usually performed only when the auditor ‘s analytical procedures suggest that there is a risk of material misstatement relating to payroll (or other expense accounts).

Question 2

List the 5 assertions related to income-statement items (that is, for transactions and events during the period).

Answer 2

Accuracy;
Occurrence;
Completeness;
Cutoff; and
Classification.