. Generally, how is the inherent risk level for the human resource management process assessed?

A. Inherent risk is normally set high for the human resource management process.

B. Inherent risk for officer compensation is set low.

C. The inherent risk associated with non-officers of the company is generally considered high risk.

D. Inherent risk is normally set low for non-officers.

7. Which of the following procedures are substantive analytical procedures that can be used to provide audit evidence related to the payroll?

A. Compare payroll costs as a percentage of sales with prior years and industry data.

B. Compare labor utilization rates and statistics with industry data.

C. Compare budgeted payroll expenses with actual payroll expenses.

D. All of the above procedures are substantive analytical procedures

8. Payroll expense properly split between direct and indirect labor would be an example of which assertion?

A. Authorization of Payroll Transactions

B. Occurrence

C. Cutoff

D. Classification

9. Procedures an auditor should perform to test the control activities related to the occurrence assertion would include all of the following, except

A. Observe proper segregation of duties.

B. Compare actual cost of goods sold to budgeted amounts.

C. Review procedures for the transfer of inventory.

D. test procedures for accounting for numerical sequence of material requisitions.

10. Substantive analytical procedures that can test the fairness of inventory and related accounts include all of the following, except:

A. Compare days outstanding in inventory to previous periods and industry data.

B. Trace a sample of payroll checks to the payroll register.

C. Compare gross profit percentage by product line with previous periods' and industry data.

D. Compare actual cost of goods sold to budgeted amounts.