An Auditor Who Discovers That Client Employees Have Committed an Illegal

question 34

Multiple Choice

An auditor who discovers that client employees have committed an illegal act that has a material effect on the client's financial statements most likely would withdraw from the engagement if:

• A)the illegal act is a violation of generally accepted accounting principles.
• B)the client does not take the remedial action that the auditor considers necessary.
• C)the illegal act was committed during a prior year that was not audited.
• D)the auditor has already assessed control risk at the maximum level.

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Definitions:

Individual

A single human being as distinct from a group, class, or family.

Betting Habit

describes the tendency of an individual to frequently gamble or make bets.

Middle-Aged Adults

Persons typically between the ages of 40 and 65, often experiencing significant life transitions and re-evaluations of life goals and achievements.

Elderly Parents

Older individuals who are in the later stages of their lives, often requiring additional care, respect, and consideration from their children or caregivers.