An Auditor Discovers a Likely Fraud During an Audit but Concludes

question 57

Multiple Choice

An auditor discovers a likely fraud during an audit but concludes that the overall effect of the fraud is not sufficiently material to affect the audit opinion. The auditor should probably:

• A)disclose the fraud to the appropriate level of the client's management.
• B)disclose the fraud to appropriate authorities external to the client.
• C)discuss with the client the additional audit procedures that will be needed to identify the exact amount of the fraud.
• D)modify the audit program to include tests specifically designed to identify the fraud and its impact on the financial statements.

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Definitions:

Willpower

The ability to control impulses and delay short-term gratification for longer-term goals.

Obese Biological Parents

Biological parents who are classified as obese based on body mass index (BMI), with potential genetic and environmental implications for the health and weight status of their offspring.

Western Notions

Ideas, beliefs, or customs that have originated or are widely accepted in Western societies, particularly in Europe and North America.

Dietary Habits

Regular eating patterns or practices that an individual follows, often influenced by cultural, personal, or health factors.