Question

When the auditor compares the cancelled check or direct deposit with the payroll journal for amount, they are concerned with the transaction-related audit objective of:

1) occurrence.
2) accuracy.
3) classification.
4) timing.

Answer 1

An auditor comparing cancelled checks to payroll records is addressing the audit objective of accuracy, which ensures recorded amounts match actual payments.

Step-by-step explanation:

When an auditor compares a cancelled check or direct deposit with the payroll journal for amount, they are addressing the transaction-related audit objective of accuracy. This objective is concerned with ensuring that the amounts recorded in the payroll journal match the actual payment amounts on the cancelled checks or direct deposits. By performing this comparison, auditors are verifying that the amounts paid to employees are recorded correctly in the company's financial records.