An Auditor Who Discovers That Client Employees Have Committed an Illegal

question 651

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 a high level.

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Definitions:

Timurid

Pertaining to the Timurid Empire, a Central Asian dynasty founded by Timur (Tamerlane) in the 14th century, known for its cultural achievements.

Mosaics

Artworks created by assembling small pieces of colored glass, stone, or other materials to form pictures or patterns, often used in decorative floor and wall treatments.

Great Mosque

A term used for a region's or nation's main mosque, which is a significant place for communal prayer in the Islamic faith.

Damascus

The capital and one of the oldest continuously inhabited cities in the world, located in Syria, known for its rich history.