Other Than Inquiring of Management About Policies They Have Established

question 20

True/False

Other than inquiring of management about policies they have established to prevent illegal acts and whether management knows of any laws or regulations that the company has violated, the auditor should NOT search for indirect-effect illegal acts unless there is reason to believe they may exist.

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Definitions:

Legal Validity

The quality of being officially acceptable or binding under the law.

Social Good

Actions or activities that benefit the largest number of people in the largest possible way, such as clean air, education, and public safety.

Tax-Exempt Status

A designation by tax authorities that allows an organization to be exempt from paying income tax on certain conditions.

Discriminated

Refers to unfair or prejudicial treatment of different categories of people or things, especially on the grounds of race, age, or sex.