Problem

An auditor is most likely to perform substantive tests of details on payroll transactions...

An auditor is most likely to perform substantive tests of details on payroll transactions and balances when

a. Cutoff tests indicate a substantial amount of accrued payroll expense.

b. The level of control risk relative to payroll transactions is set at low.

c. Substantive analytical procedures indicate unusual fluctuations in recurring payroll entries.

d. Accrued payroll expense consists primarily of unpaid commissions.

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