If Noncompliance with a Law Is Discovered During the Audit

question 69

Multiple Choice

If noncompliance with a law is discovered during the audit of a publicly held company,the auditors should first:

• A)Notify the regulatory authorities.
• B)Determine who was responsible for the noncompliance.
• C)Intensify the examination to identify noncompliance with any laws.
• D)Report the act to those in charge of governance within the client's organization.

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Definitions:

Common Dividends

Distributions of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders known as common shareholders.

Fundamental Analysis

The assessment of a company's value by examining related economic, financial, and other qualitative and quantitative factors.

Common Dividends

Payments made to shareholders from a company's earnings, usually in the form of cash or additional stock, representing a portion of the earnings allocated to common stock.

Actual Growth Rates

Refers to the increase in a company's revenue or earnings, measured over a specific period, reflecting the real expansion of its business activities.