When an Auditor Becomes Aware of a Possible Illegal Act

question 931

Multiple Choice

When an auditor becomes aware of a possible illegal act by a client, the auditor should obtain an understanding of the nature of the act to:

• A) Evaluate the effect on the financial statements.
• B) Determine the reliability of management's representations.
• C) Consider whether other similar acts may have occurred.
• D) Recommend remedial actions to those charged with governance.

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Definitions:

Sexual Orientation

An inherent or immutable enduring emotional, romantic or sexual attraction to other people, which can be towards the same sex, opposite sex, or both.

Stigma

A mark of disgrace or infamy; a stain or reproach, as on one's reputation, often associated with a particular characteristic, condition, or disease.

Single-parent Families

Households headed by one adult raising one or more children, often requiring unique strategies for managing family and work responsibilities.

Physical Problems

Issues or conditions affecting the physical body, potentially impairing normal functioning or leading to health complications.