Question: Why is it unwise for an auditor to stand by
Why is it unwise for an auditor to stand by the plant gate and time clock to observe employees checking in for work shifts?
Answer to relevant QuestionsWhy might an auditor conduct a surprise observation of a payroll distribution? What should be observed? If the actual sales for the year are substantially lower than the sales forecast at the beginning of the year, what potential valuation problems may arise in the production cycle accounts? How can an auditor determine whether the amount of labour cost charged to production was actually paid to employees? Refer to the internal control questionnaire on a payroll system (Exhibit 13A–2 in Appendix 13A) and assume the answer to each question is “no.”Required:Prepare a table matching each question to an error or fraud that ...During his examination of the inventories and related accounts of Consumer Electronics Inc., a manufacturer and distributor of small appliances, an auditor encountered the following:a. Several trucks loaded with finished ...
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