When an Auditor Becomes Aware of a Possible Illegal Act

question 37

Multiple Choice

When an auditor becomes aware of a possible illegal act by a client, the auditor should obtain an understanding of the nature of the act in order to

• A)Evaluate the effect on the financial statements.
• B)Determine the reliability of management's representations.
• C)Consider whether other similar acts may have occurred.
• D)Recommend remedial actions to the audit committee.

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Definitions:

Populist Movement

A political movement in the late 19th century that sought to represent the interests of farmers and laborers against the elites and big business.

Origins

Origins refers to the beginning or source of something, often explaining its creation, initial purpose, or the inception of ideas, objects, or phenomena.

Promised

Guaranteed or vowed to be given, done, or happening in the future.

New Cities

Urban areas that have been recently founded or developed, often characterized by modern planning and infrastructure.