Brandon Is Working on the Audit of Michum Inc

question 59

Multiple Choice

Brandon is working on the audit of Michum Inc.In accordance with CAS 550 (related parties) ,Brandon had obtained a management confirmation of all related-party transactions.When auditing the purchasing cycle of Michum,Brandon found that the company had purchased over $500 000 of merchandise from Elite Crust Inc. ,a company that is owned by the CEO's brother.The $500 000 purchase is a material amount and it was not included in the confirmation provided by Michum.Brandon should

• A)inform the audit committee.
• B)qualify the audit report.
• C)discuss this issue with the management of Michum.
• D)reduce materiality to increase the likelihood of discovering other undisclosed related party transactions.

---

Definitions:

Integration

The process of combining parts into a whole, refers to the blending of populations, cultures, or systems.

Posttraumatic Stress Disorder

A state of mental distress caused by either experiencing firsthand or witnessing a dreadful occurrence, accompanied by repetitive nightmares, flashbacks, and elevated levels of anxiety.

Acute Stress Disorder

A mental health condition characterized by a range of symptoms that occur immediately after experiencing a traumatic event.

Hallucinogens

Substances that cause hallucinations by affecting the mind's perceptions.