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:

Snowmelt

The runoff produced by melting snow.

Hundred-year Flood

is a term used to describe a flood event that has a 1% chance of occurring in any given year, used as a standard metric in flood risk assessment.

Probability

The statistical description of the likelihood that an event will occur.

Floodplain

A flat area of land adjacent to a river or stream that experiences occasional or regular flooding.