Which of the Following Is Correct Concerning Required Auditor Communications

question 26

Multiple Choice

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

• A)Fraud that involves senior management should be reported directly by the auditor to the audit committee regardless of the amount involved.
• B)Fraud with a material effect on the financial statements should be reported directly by the auditor to the Securities and Exchange Commission.
• C)Any requirement to disclose fraud outside the entity is the responsibility of management and not that of the auditor.
• D)The professional standards provide no requirements related to the communication of fraud, but the auditor should use professional judgment in determining communication responsibilities.

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Definitions:

Hypothesis

A suggested theory put forward based on minimal evidence to initiate more detailed research.

Null Hypothesis

A statement in statistical inference that proposes there is no significant effect or relationship between two measured phenomena.

Randomness Conjecture

A proposition suggesting that specific systems or sequences cannot be predicted due to their inherent randomness.

Affirmation of Chance

The acknowledgment of the role of randomness or unpredictability in events or outcomes.