Guys — any help you can give me to understand this question I would appreciate it. I consistently get these type of questions wrong and cannot grasp why.
In determining the effectiveness of an entity's internal controls relating to the occurrence assertion for payroll transactions, an auditor most likely would inquire about and:
a. Observe the segregation of duties concerning personnel responsibilities and payroll disbursement.
b. Inspect evidence of accounting for pre-numbered payroll checks.
c. Recompute the payroll deductions for employee fringe benefits.
c. Verify the preparation of the monthly payroll account bank reconciliation.
I answered B because my thought is Existence/Occurrence is from the FS to the supporting documents.
The correct answer is A with the explanation that the occurrence assertion as it relates to payroll transactions would correspond to an audit objective to determine that payroll transactions actually occurred (that all payroll checks were issued to valid employees for hours actually worked)
Also, B is wrong with the explanation that Inspecting evidence related to pre-numbering of payroll checks would relate to the completeness assertion.
Can I just say”HELP”!!
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