In a Payroll Audit, a Staff Auditor Suspects That Signatures

question 415

Multiple Choice

In a payroll audit, a staff auditor suspects that signatures on some of the documents being sampled for examination are not authentic. What action should the auditor take before proceeding with the examination?

• A) Suggest to the payroll manager that the suspicious documents should be sent to the organization's security department for forensic review.
• B) Keep the suspicious documents in the workpaper file until the end of the engagement, and then discuss the suspicions with the payroll manager.
• C) Discuss the suspicious documents with payroll staff to seek their views on the authenticity of the signatures.
• D) Review the suspicious documents with the chief audit executive and seek advice concerning further examination.

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Definitions:

Time Constant

The amount of time required for the current flow through an inductor or for the voltage applied to a capacitor to reach 63.2% of its total value.

Induced Voltage

Voltage generated in a conductor or coil due to a change in magnetic flux, according to Faraday's law of electromagnetic induction.

Eddy Current

Circular induced current contrary to the main currents. Eddy currents are a source of heat and power loss in magnetically operated devices.

Hysteresis

The phenomenon in which the state of a material lags behind changes in the effect causing it, such as the lagging of magnetic flux density behind the magnetizing force.