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Question

An auditor conducts a surprise check on the pay day(i.e.,) the day wages and salaries are paid. The primary purpose of this audit procedures is?

A
To ensure that there are no ghost workers.
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B
To ensure the casual workers employed are authorized by the supervisor.
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C
To test procedures for distributing pay cheques.
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D
To obtain understanding of internal control system.
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Solution

The correct option is B To test procedures for distributing pay cheques.
A test check can be applied by the auditor to ensure that the payment of salaries and wages are done properly. To ensure this, auditor must visit the organization on the pay day and check whether the wages is paid to the respective person and proper disbursement of cheque is done to the respective staff.

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