An Auditor Discovers a Likely Fraud During an Audit, but Concludes

question 20

Multiple Choice

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

• 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 report.

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Definitions:

Wage Ratio

The comparison of wages between different groups, sectors, or genders, often used to analyze disparities and equality in pay.

Economic View

The economic view refers to analyzing situations, problems, or policies from the perspective of economics, focusing on resource allocation, incentives, and efficiency.

Domestic Output

The combined worth of all items and services produced domestically within a nation in a set period of time.

Discrimination

Unfair or prejudicial treatment of individuals based on characteristics such as race, gender, age, or sexual orientation.