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Vulcan Metals Company is currently being audited by Bright CPA Firm. The CPA Firm has...

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Accounting

Vulcan Metals Company is currently being audited by Bright CPA Firm. The CPA Firm has convened a meeting of the partners and senior managers to discuss how best to audit the client's system of internal controls related to the payroll function. Which of the following choices represent an appropriate audit strategy which could be used to test internal controls related to payroll?

Bright CPA Firm could consider employing test data to enter fictitious data into a client's payroll system. This fictitious data can be used by the auditor to determine if appropriate internal controls are effective.

Bright CPA Firm could decide to request written assurances related to the payroll function from the client's senior management. These written assurances can be used to indemnify the auditor if the client is ever sued.

Bright CPA Firm could consider adopting an audit strategy whereby the auditor enters test data into the clients system to ensure that false data is flagged. If the auditor can substantiate the effectiveness of internal controls related to payroll,

then no substantive testing is necessary.

None of these answer choices are correct.

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