Which of the Following Statements Is True Regarding an Accountant's

question 161

Multiple Choice

Which of the following statements is true regarding an accountant's consideration of fraud/illegal acts in compilation and review engagements?

• A) The accountant is not required to perform procedures designed to detect material misstatements due to fraud or illegal acts.
• B) The accountant must inform an appropriate level of management of all instances of fraud or illegal acts.
• C) The accountant must report only definite instances of fraud or an illegal act, but need not report information indicating that fraud or an illegal act may have occurred.
• D) Information indicating that fraud or an illegal act may have occurred should be reported in writing to an appropriate level of management.

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Definitions:

Perceptual Constancy

The ability of the perceptual system to recognize objects as having consistent shape, size, and color despite changes in perspective, distance, or lighting.

Visual Disparity

The difference in the images received by the two eyes, which contributes to the perception of depth.

Hair Cells

Sensory cells located in the inner ear that are essential for hearing and balance.

Auditory Nerves

The auditory nerves are a set of nerves that carry sound information from the ears to the brain, enabling hearing.