During an Interview with a Manager in a Company's Claims

question 206

Multiple Choice

During an interview with a manager in a company's claims department, an auditor noted that the manager became nervous and changed the subject whenever the auditor raised questions about certain types of claims. The manager's answers were consistent with company policies and procedures. When documenting the interview, the auditor should:

• A) Document the manager's answers, noting the nature of the nonverbal communication.
• B) Document the manager's answers but not the nonverbal communication because it is subjective and is not corroborated.
• C) Conclude that the nonverbal communication is persuasive and that sufficient evidence exists to begin a fraud investigation.
• D) Disregard the interview entirely because the verbal and nonverbal communications were contradictory.

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Definitions:

Sales Tax

A tax levied by the government on the sale of goods and services.

Credit Sales

Credit sales are transactions where goods or services are provided to a customer with the agreement that payment will be made at a later date.

Liability Classification

The process of categorizing liabilities on the balance sheet as either current (due within one year) or long-term.

Short-Term Obligation

A debt or other financial obligation that is due to be paid within one year or within the entity's operating cycle if longer.