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During the planning stage of an assurance engagement, a payroll clerk informed the internal auditor...

During the planning stage of an assurance engagement, a payroll clerk informed the internal auditor that he is often asked to add new employees to the payroll without any formal new-hire documentation from human resources. The auditor is concerned that this increases the risk for fraud. To complete engagement planning, which of the following is the most appropriate next step for the auditor to take?

A.

Increase the sample size to be tested, ensuring a thorough review of the payroll records.

B.

Advise the chief audit executive of the clerk ' s assertion, despite the lack of supporting evidence.

C.

Ask the clerk to provide a list of any suspicious new employee names on the payroll.

D.

Investigate the matter further to understand precisely how many payroll records were affected.

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