Which of the Following Is Correct Concerning Required Auditor Communications

question 26

Multiple Choice

Which of the following is correct concerning required auditor communications about fraud?

• A)Fraud that involves senior management should be reported directly by the auditor to the audit committee regardless of the amount involved.
• B)Fraud with a material effect on the financial statements should be reported directly by the auditor to the Securities and Exchange Commission.
• C)Any requirement to disclose fraud outside the entity is the responsibility of management and not that of the auditor.
• D)The professional standards provide no requirements related to the communication of fraud, but the auditor should use professional judgment in determining communication responsibilities.

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Definitions:

Fissure

A deep, narrow, elongated cleft or groove on the surface of an organ or tissue.

Protuberance

A protuberance refers to a part of the body or an organ that projects out or bulges beyond the surface level, often due to swelling or growth.

Cytoplasmic Extensions

Projections or protrusions from the cell body, such as dendrites and axons in neurons, which help in communication and transport between cells.

Canaliculi

Small, channel-like structures within bone tissue that allow for the exchange of nutrients and waste products between blood vessels and osteocytes.