An Auditor Who Discovers That Client Employees Have Committed an Illegal

question 64

Multiple Choice

An auditor who discovers that client employees have committed an illegal act that has a material effect on the client's financial statements most likely would withdraw from the engagement if

• A) The illegal act is a violation of generally accepted accounting principles.
• B) The client does not take the remedial action that the auditor considers necessary.
• C) The illegal act was committed during a prior year that was not audited.
• D) The auditor has already assessed control risk at the maximum level.

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Definitions:

Statistics

A branch of mathematics dealing with the collection, analysis, interpretation, and presentation of masses of numerical data.

Fairness

The quality of being impartial, just, and equitable, especially in situations that involve decisions or judgments.

Test Takers

are individuals who undertake an assessment or examination, the results of which are used for evaluation, placement, or diagnostic purposes.

Personal Characteristics

Attributes, traits, or qualities that define an individual or are inherent in human personality.