Final answer:
The assertion that auditors rarely expect misstatements in payroll transactions is false. Auditors practice due diligence and professional skepticism, understanding that payroll is an area susceptible to errors and fraud.
Step-by-step explanation:
The statement that auditors seldom expect to find misstatements when testing payroll transactions is false. In reality, auditors approach every aspect of financial statement review, including payroll transactions, with professional skepticism. This approach means they consider the possibility of misstatements due to errors or fraud in all areas. When it comes to payroll, there can be complex regulations and opportunities for both unintentional mistakes and intentional wrongdoing, so auditors are particularly diligent in their testing and verification processes. Therefore, a more correct statement might be: Auditors apply professional skepticism and due diligence when testing payroll transactions to uncover any potential misstatements.