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CS Professional · Internal and Forensic Audit · Internal Audit Tools and Techniques

While reviewing the payroll of Kaveri Engineering Pvt Ltd, the internal auditor uses audit software to extract all employees who share the same bank account number with another employee. Which fraud risk is this test primarily designed to detect?

The test targets ghost employees or duplicate payroll payments. Several employees sharing one bank account is a red flag that fictitious names may have been added to payroll and the salaries diverted. Computer-assisted data matching finds such exceptions quickly across the entire population rather than a sample.

  1. AUnderstatement of statutory deductions
  2. BGhost employees or duplicate payroll paymentsCorrect
  3. COverstatement of closing inventory
  4. DUnrecorded sales revenue

Explanation

Matching bank account numbers across employee records is a classic data-matching test for fictitious (ghost) employees or duplicate payments diverted to one account. It does not address deductions, inventory or sales. The other options relate to different areas and different tests.

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