TERMS IN THIS SET (26) The term "receivables" includes allī. The search for unrecorded liabilities for a public company includes procedures usually performed through the:ĭ. Consider the possibility of a misstatement in the financial statements. Evaluate management's performance in causing this decline.ĭ. Express an opinion that is qualified due to the inability of the client company to continue as a going concern.ī. As a result of analytical procedures, the independent auditors determine that the gross profit percentage has declined from 30 percent in the preceding year to 20 percent in the current year. Make a surprise observation of the company's regular distribution of paychecks on a test basis. Visit the working areas and verify that employees exist by examining their badge or identification numbers. Make a surprise observation of the company's regular distribution of paychecks on a test basis.ĭ. Examine employees' names listed on payroll tax returns for agreement with payroll accounting records.Ĭ. Examine human resources records for accuracy and completeness.ī. Which of the following is the best way for the auditors to determine that every name on a company's payroll is that of a bona fide employee presently on the job?Ī. Test whether employee time reports are approved by supervisors. Test computations of compensation under profit sharing for bonus plans.ĭ. Investigate fluctuations in salaries, wages, and commissions.ī. TERMS IN THIS SET (35) Which of the following is least likely to be considered a substantive procedure relating to payroll?Ī.