The character makes an item's aura register to detection spells (and similar spells) as though it were either a magic item of the type that the character specifies or the subject of a spell that the character specifies.
If the object bearing magic aura has identify cast on it or is similarly examined, the examiner recognizes that the aura is false and detects the object's actual qualities if he succeeds at a Will save. Otherwise, he believes the aura and no amount of testing reveals what the true magic is.
If the targeted item's own aura is exceptionally powerful (if it is an artifact, for instance), magic aura doesn't work.
Note: A magic weapon, shield, or suit of armor must be a masterwork item, so a sword of average make, for example, looks suspicious if it has a magical aura.