An Auditor Concludes That a Client Has Committed an Illegal

question 41

Multiple Choice

An auditor concludes that a client has committed an illegal act that has not been properly accounted for or disclosed. The auditor is most likely to withdraw from the engagement when the:

• A) Auditor is precluded from obtaining sufficient competent evidence about the illegal act
• B) Illegal act has an effect on the financial statements that is both material and direct
• C) Auditor cannot reasonably estimate the effect of the illegal act on the financial statements
• D) Client refuses to take the remedial steps deemed necessary by the auditors

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Definitions:

Witnessed

Having seen or observed an event, action, or situation directly, making one a source of information or evidence about it.

Beaten

Subjected to physical attack or harm, often resulting in injury or defeat.

Mothers

Female parents who have given birth to, adopted, or raised a child, playing a significant role in the child's life through nurturing, protection, and guidance.

Social Status

The position or rank of a person within the social hierarchy, often influenced by factors like wealth, occupation, and education.