Final answer:
The statement is true as accuracy and cutoff are indeed major balance-related audit objectives when testing payroll liabilities, ensuring correct amounts and proper recording in financial periods.
Step-by-step explanation:
The statement that the two major balance-related audit objectives in testing payroll liabilities are accuracy and cutoff is True. When auditing, accuracy is crucial to ensure that transactions are recorded at the correct amounts. The cutoff objective ensures that transactions are recorded in the correct accounting period. Auditing payroll liabilities involves checking that the amounts owed to employees and relevant institutions (e.g., tax authorities) are accurately calculated and recognized in the company's financial statements in the appropriate period.
The statement is accurate. In the context of auditing payroll liabilities, the two major balance-related audit objectives are accuracy and cutoff. Accuracy is a fundamental objective in auditing to verify that transactions are recorded at the accurate and appropriate amounts. This is particularly significant in the context of payroll liabilities, where precise calculations of amounts owed to employees and other entities, such as tax authorities, are essential for financial accuracy.
Cutoff, the second major objective, is crucial for ensuring that transactions are recorded in the correct accounting period. In the case of payroll, this involves confirming that all payroll-related transactions are appropriately recognized in the financial statements for the relevant period, preventing misstatements or omissions that could impact financial reporting accuracy. These objectives collectively contribute to the thorough and reliable audit of payroll liabilities, ensuring financial statement integrity.