Which of the Following Would Raise a Red Flag in the Audit

question 37

Multiple Choice

Which of the following would raise a red flag in the audit of payroll?

• A) One person in the company is authorized to sign all payroll cheques.
• B) The endorsement on a cancelled payroll cheque included the words "for deposit only" above the payee's signature.
• C) The endorsement on a cancelled payroll cheque included the signature of a supervisor below the signature of the payee.
• D) A supervisor initialled the time card of an employee.

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Definitions:

Terminal Cancer

A stage of cancer that is advanced and incurable, leading to the eventual death of the patient.

Annual Report

A comprehensive report on a company's activities, financial performance, and strategy, usually published at the end of the fiscal year.

Insider Trade

The buying or selling of a publicly-traded company's stock by someone with access to non-public, material information about the company.

Provincial Securities Act

Legislation enacted by a province to regulate the trading of securities within its jurisdiction.