When the Auditors Become Aware of Noncompliance with a Law

question 109

Multiple Choice

When the auditors become aware of noncompliance with a law or regulation committed by client personnel,the primary reason that the auditors should obtain a better understanding of the nature of the act is to

• A) Recommend remedial actions to the audit committee.
• B) Evaluate the effect of the noncompliance on the financial statements.
• C) Determine whether to contact law enforcement officials.
• D) Determine whether other similar acts could have occurred.

---

Definitions:

Cloning

The process of creating genetically identical copies of a biological entity.

Content Validity

The extent to which a test measures all aspects of the concept or construct it aims to assess.

Standardized Validity

The extent to which the results of a test or measurement are consistent and accurate across different populations and settings.

High Reliability

The concept or state of being able to function under high levels of uncertainty or risk without significant failures or accidents.