An Auditor Who Discovers That Client Employees Have Committed an Illegal

question 19

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 noncompliance 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:

Latent Homosexual

A term historically used to describe a person who has homosexual desires or tendencies that are not openly expressed or consciously acknowledged.

Defence Mechanism

An unconscious tactic employed to shield an individual from the distress caused by thoughts or feelings that are deemed unacceptable.

Identification

A psychological process in which an individual assimilates an aspect, property, or attribute of the other and is transformed, wholly or partially, after the model the other provides.

Self-Esteem

An individual's subjective evaluation of their own worth, or the confidence and satisfaction in oneself.