When an External Auditor Suspects That Personnel at an Audit

question 26

Multiple Choice

When an external auditor suspects that personnel at an audit client have committed an illegal act,the auditor has a duty to:

• A) Evaluate whether top management explicitly or implicitly authorized the act
• B) Ignore the act if it concludes that the act has no financial statement effect
• C) Confront the particular person suspected of committing the offending act
• D) Report the act to the SEC of the audit client is a public company

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Definitions:

Marginal Benefit

The increased enjoyment or advantage received from the consumption of one extra item of a good or service.

Economics Grade

A measurement or assessment of a student's understanding and proficiency in the subject of economics, typically given as part of an academic evaluation.

Marginal Benefit

The increased pleasure or advantage received from the consumption or creation of an additional unit of a good or service.

Marginal Benefit

The supplementary enjoyment or value derived by a person upon consuming an extra unit of a particular good or service.