Final answer:
Tracing transactions from the payroll journal to the human resources department to verify employment status is the most effective method to test for nonexistent employees. It directly checks if an employee listed on payroll actually exists and works for the company.
Step-by-step explanation:
When considering the most effective audit procedures to detect nonexistent employees, the most relevant method mentioned is tracing transactions recorded in the payroll journal to the human resources department to determine employment status. This process enables auditors to verify that employees receiving pay are legitimate and currently employed by the company. Examining cancelled checks for proper endorsement is also significant but focuses more on the authenticity of the payment rather than the existence of the employee. Recalculating net pay and reconciling payroll disbursements can detect other types of payroll fraud or errors, but these methods do not directly address the issue of nonexistent employees.
Scenario Application: In a scenario where a retail cashier is confronted with the suspicion of theft due to a short cash drawer, the employee should seek evidence to disprove the accusation. Randomizing resumes in experimental studies or using economic mystery shoppers are methods of detecting discrimination but are not directly related to an individual case of alleged theft.
Concerning probability, determining how many employees are expected to be audited, the likelihood that no one was audited, and the probability of at least three being audited involves statistical analysis. However, these aspects do not pertain to the detection of nonexistent employees.
Tracing payroll transactions to HR records is the most effective method among the options given to detect nonexistent employees as it allows direct verification of employment status.