Final answer:
True, The primary purpose of a surprise payroll payoff is indeed to detect fraudulent hours reported by employees, which helps prevent payroll fraud. This practice has been historically significant as demonstrated by a 1963 case, where falsified Bracero records were brought to light.
Step-by-step explanation:
The statement that the primary purpose of a surprise payroll payoff is to detect employees who have reported more time than was actually worked (fraudulent hours) is true. Such internal controls are implemented by businesses to prevent and detect various types of payroll fraud. These frauds could involve employees claiming for hours they did not work, a practice which incurs unnecessary costs for the company. By conducting unscheduled payroll audits, businesses can immediately check current records against actual time worked, often identifying discrepancies, if any exist, and thereby mitigating the risk of payroll fraud.
Such a case is highlighted by the 1963 story in the Los Angeles Times where a bookkeeper testified that her former employer had falsified the records of Braceros. This historical example shows that payroll audits have long been a tool for combating wage theft and fraudulent record-keeping practices, protecting both the interests of the workers and the financial integrity of businesses.