Who Should the Auditors First Notify If They Discover a Material

question 92

Multiple Choice

Who should the auditors first notify if they discover a material misappropriation of assets?

• A)The PCAOB.
• B)The SEC.
• C)The management of the company.
• D)The audit committee of the company.
• E)They are not required to notify anyone.

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Definitions:

Material Costs

The expenses incurred for materials that are directly used in the production of goods or services.

Specified Characteristics

Detailed attributes or features that are identified as requirements or standards for a particular object, process, or service.

Nominal

Relating to names or categories that are only labeled and do not have an inherent order or rank.

Ordinal

Relating to a classification where order or position is significant but not the magnitude of difference between items.