When testing for fraudulent hours or fraudulent expense reports
A)it is easy for the auditor to discover fraudulent hours because of the abundance of available evidence.
B)it is difficult to prevent fraud in these two areas with adequate internal controls.
C)management falsification of expense reports can be an indicator of disregard for internal controls and the potential for fraud in other areas.
D)examining payroll records for approval is an important substantive tests of transactions to uncover fraudulent hours.

Question

Quizplus · Accepted Answer

Management falsification of expense reports can be an indicator of a disregard for internal controls, which increases the likelihood of fraud in other areas. It is important to investigate and address such fraudulent activity. The other options are either incorrect or incomplete.

When Testing for Fraudulent Hours or Fraudulent Expense Reports