An Auditor Who Discovers That Client Employees Have Committed an Illegal

question 69

Multiple Choice

An auditor who discovers that client employees have committed an illegal act with material consequences on the financial statements is most likely to seek legal advice and consider withdrawing from the engagement if ________.

• A)the illegal act is a violation of generally accepted accounting principles
• B)the client does not take appropriate action after being informed about the illegal act
• 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:

Inoculation Theory

A social psychological and communication theory that explains how attitudes and beliefs can be made more resistant to change by exposing them to counter-arguments.

Novel Arguments

Innovative or unique lines of reasoning or persuasion not previously presented or considered.

Persuasion

The act or process of influencing someone's beliefs, attitudes, intentions, motivations, or behaviors through communication.

Space Exploration

The investigation of physical conditions in space and on stars, planets, and other celestial bodies through the use of satellites, space probes, or spacecraft with human crews.