Required Auditor Communication to the Audit Committee Concerning Illegal Acts

question 58

Multiple Choice

Required auditor communication to the Audit Committee concerning illegal acts detected includes:

• A) all material items.
• B) all that are not adequately addressed by management.
• C) only those that have an effect on the audit report.
• D) only those that constitute management fraud.
• E) any such acts.

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Definitions:

Past Consideration

In contract law, the concept that an act or benefit provided before and independently of a promise does not constitute valid consideration for the promise.

Accord and Satisfaction

A legal contract wherein a dispute is settled by the parties involved agreeing to provide and accept something different than originally owed.

Doctrine of Promissory Estoppel

A legal principle preventing a party from withdrawing a promise made when the other party has reasonably relied on that promise to their detriment.

Preexisting Duty Rule

A legal principle stating that an existing obligation in a contract cannot serve as consideration for a new contract or for modifying the existing contract.