When the Auditor Knows That an Illegal Act Has Occurred

question 108

Multiple Choice

When the auditor knows that an illegal act has occurred, the first course of action by the auditor is to:

• A) consider the effects on the financial statements, including the adequacy of disclosure.
• B) not report it to the proper governmental authorities.
• C) withdraw from the engagement.
• D) issue an adverse opinion.

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Definitions:

Universal Entitlement

Policies or systems where all members of a society have the right to receive certain benefits or services, such as healthcare or education, regardless of socioeconomic status.

Quakers

Members of the Religious Society of Friends, a Christian movement known for its commitment to pacifism, simplicity, and equality.

Religious Services

Practices, ceremonies, and rituals conducted in adherence to the beliefs and tenets of a particular faith or religion.

English West Indies

A term referring to the Caribbean islands that were once part of the British Empire, known for their colonial history and involvement in the sugar trade.