If the Auditor Considers an Illegal Act to Be Sufficiently

question 30

Multiple Choice

If the auditor considers an illegal act to be sufficiently serious to warrant withdrawing from the engagement, the auditor should:

• A)notify all parties who may rely upon the company's illegal act.
• B)consult with legal counsel as to what other action, if any, should be taken.
• C)return all incriminating evidence and working papers to the client's audit committee for follow-up.
• D)contact the successor auditor to make the successor aware of the possible consequences of relying on management's representations.

---

Definitions:

Defence Mechanism

Psychological strategies brought into play by individuals, unconsciously, to protect themselves from anxiety or to provide a refuge from a situation with which they cannot currently cope.

Regression

A defense mechanism leading an individual to revert to an earlier stage of development in response to stress or conflict.

Immaturity

A lack of development, whether in biological, emotional, or psychological realms, often resulting in childlike behavior in adults.

Psychoanalytic Theory

A theory of personality organization and the dynamics of personality development that guides psychoanalysis, developed by Sigmund Freud, focusing on unconscious motives and conflicts.