An Auditor May Be Required to Disclose Fraud Outside the Client

question 34

Multiple Choice

An auditor may be required to disclose fraud outside the client entity in each one of the following situations except:

• A) in response to a court subpoena.
• B) to the SEC when the auditor has withdrawn from the engagement.
• C) to a successor auditor who makes inquiries in accordance with professional standards.
• D) to the GAO when the auditor has reported illegal acts to the audit committee.
• E) to a funding agency in accordance with audit requirements for entities that receive governmental financial assistance.

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Definitions:

Petty Cash Fund

A nominal sum of cash reserved for quick payments of assorted trivial expenses.

Replenishing

Refers to the process of adding stock or supplies to bring quantities back up to predetermined levels.

Debit To Cash

An accounting entry that increases the cash balance in a company's books, reflecting an influx of money.

Mail Receipts

Documentation or evidence of receiving goods or correspondence through the postal service.