Which of the Following Is Correct Concerning Requirements About Auditor

question 39

Multiple Choice

Which of the following is correct concerning requirements about auditor communications about fraud?

• A)Fraud that involves senior management should be reported directly to the audit committee regardless of the amount involved.
• B)All fraud with a material effect on the financial statements should be reported directly by the auditor to the Securities and Exchange Commission.
• C)Fraud with a material effect on the financial statements should ordinarily be disclosed by the auditor through use of an "emphasis of a matter" paragraph added to the audit report.
• D)The auditor has no responsibility to disclose fraud outside the entity under any circumstances.

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Definitions:

Intermediate Sanctions

Criminal justice penalties that fall between traditional probation and full incarceration, such as house arrest or community service.

Abstract

A summary of the key points of a larger document or presentation, often used in academic and professional contexts.

Ethical Society

An organization or community dedicated to promoting ethical principles and fostering ethical behavior among its members and in society at large.

Government Role

The responsibilities and activities undertaken by a government, which may include legislation, administration, and the implementation of public policy.