Which transaction cycle includes auditing payroll and personnel?

The transaction cycle that includes auditing payroll and personnel is the revenue cycle. This cycle encompasses the processes associated with earning revenue, including the initiation of sales, the receipt of cash, and importantly, the management of employee compensation and related payroll functions.

Payroll is a critical component because it directly affects the costs associated with generating revenue. Proper auditing within this cycle ensures that payroll expenses are accurately reported and that personnel management practices follow regulatory guidelines, which is essential for maintaining financial integrity.

The other cycles mentioned, such as the expenditure cycle, typically focus on the acquisition of goods and services, while the financing cycle deals with how a company raises and repays capital. The property, plant, and equipment cycle pertains to the acquisition and management of long-term assets. Therefore, these do not directly involve payroll processes as inherent to their core functions. Thus, recognizing the relevance of payroll within the revenue cycle helps clarify why this choice is the most appropriate in the context of auditing.