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.

---

Definitions:

Doctrine of Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made to another if the latter has relied on that promise to their detriment.

Charitable Subscriptions

Commitments made by individuals or organizations to donate money to charities, typically on a recurring basis.

Banker's Association

An organization that represents the interests of banks and financial institutions, providing advocacy, information, and guidelines.

Off-Duty Deputy

A law enforcement officer who is not currently on their assigned work shift, yet may still hold certain responsibilities and legal powers.