If an Illegal Act Is Discovered During the Audit of a Publicly-Held

question 7

Multiple Choice

If an illegal act is discovered during the audit of a publicly-held company, the auditor should:

• A)notify the regulatory authorities.
• B)determine who was responsible for the illegal act.
• C)intensify the audit.
• D)report the act to high-level personnel within the client's organisation.

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Definitions:

Security Returns

The gains or losses from investing in a financial security, usually expressed as a percentage of the investment's initial cost.

Macro Events

Large-scale events that affect the broad economy or financial markets, including political changes, natural disasters, or widespread economic shifts.

Firm-Specific Events

Events that affect a particular company directly, such as earnings reports, mergers, or product launches, which can impact the company's stock price independent of market trends.

Portfolio Risk

The level of uncertainty or potential financial loss inherent in an investment portfolio.