1. If someone made an accusation that there were phantom employees on the payroll, what procedure would detect that fact?

a. Tracing payroll stubs to I-9 forms.

b. Comparing payroll register to the general ledger accounts.

c. Surprise delivery of paychecks to employees.

d. Verification of payroll sub-ledger to general ledger balances.

2. In performing analytical procedure over debt interest, the auditor finds company reported interest expense is materially higher than the auditors expectations. The most likely conclusion for the auditor would be that the company has not

a.recorded interest bearing debt in its records.

b. recorded paid or accrued all interest expense.

c. properly accounted for the discount of bonds payable account.

d. properly recorded interest income.