If the Client Refuses to Accept an Audit Report That

question 38

Multiple Choice

If the client refuses to accept an audit report that is qualified due to the known existence of an illegal act, the auditor should:

• A) withdraw from the engagement and indicate the reasons to the audit committee in writing.
• B) issue an adverse opinion if management agrees to fully disclose the matter.
• C) withdraw from the engagement and indicate the reasons to the SEC or other regulatory body in writing.
• D) issue a disclaimer of opinion instead.
• E) issue an unqualified opinion if management agrees to fully disclose the matter.

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Definitions:

U.S.

A country in North America, formally known as the United States of America, characterized by a significant influence on global economics, culture, and politics.

France

A country in Western Europe known for its history, culture, and significant contributions to art, science, and philosophy.

Germany

A country in Central Europe known for its rich cultural history and strong economy.

Japan

A country located in East Asia, known for its rich culture, technological advancements, and as a major economic power.