An Auditor Discovers a Likely Fraud During an Audit but Concludes

question 15

Multiple Choice

An auditor discovers a likely fraud during an audit but concludes that the overall effect of the fraud is not sufficiently material to affect the audit opinion.The auditor should probably

• A) Disclose the fraud to the appropriate level of the client's management.
• B) Disclose the fraud to appropriate authorities external to the client.
• C) Discuss with the client the additional audit procedures that will be needed to identify the exact amount of the fraud.
• D) Modify the audit program to include tests specifically designed to identify the fraud and its impact on the financial statements.

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Definitions:

Schema

A cognitive framework or concept that helps organize and interpret information in the world around us.

Drinking Alcohol

The act of consuming beverages that contain ethanol, which can affect the body and mind in various ways depending on the amount and frequency of consumption.

Explicit Memory

The system for long-term storage of conscious memories that can be verbally described.

Conscious Recollection

The intentional and deliberate remembering of information that one has previously learned or experienced.