If, as a Result of Auditing Procedures, an Auditor Believes

question 28

Multiple Choice

If, as a result of auditing procedures, an auditor believes that a client may have committed illegal acts, which of the following actions should be taken immediately by the auditor?

• A)Consult with the client's legal counsel and with the auditor's legal counsel to determine how the suspected illegal acts will be communicated to the shareholders.
• B)Extend normal auditing procedures to ascertain whether the suspected illegal acts may have a material effect on the financial report.
• C)Inquire of the client's management and consult with the client's legal counsel and/or other specialists, as necessary, to obtain an understanding of the nature of the acts and their possible effects on the financial report.
• D)Notify the audit committee about the nature of the acts and request that they give guidance with respect to the approach to be taken by the auditor.

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Definitions:

Creatinine

A waste product produced by muscles from the breakdown of a compound called creatine, commonly measured in blood or urine tests as a marker of kidney function.

Intravenous Moderate Sedation

A controlled administration of drugs through the vein to reduce patient awareness and discomfort during medical procedures.

Substance Abuse

The harmful or hazardous use of psychoactive substances, including alcohol and illicit drugs.

Latex Allergy

An allergic reaction to natural rubber latex, causing symptoms ranging from skin irritation to severe anaphylaxis.