A PA's Audit Client Is a Small Charity Which Funds

question 26

Multiple Choice

A PA's audit client is a small charity which funds development projects in a small foreign country.Most of its donations come in the form of cash,with tax receipts issued to the donors.Included in the cash receipts are weekly donations by one person,Mr.X,whose last name is easily identifiable as coming from that foreign country.Some of these cash donations exceed $10,000.The PA once asked about Mr.X and accepted as an answer that Mr.X was a wealthy entrepreneur but the PA has done no other work.Which of the following statements is TRUE?

• A)Assuming the PA has performed all other necessary and appropriate procedures,he may provide a clean opinion.
• B)Assuming the PA does no further investigation of this matter,the PA may be considered willfully blind and complicit in an illegal act.
• C)The PA may be associated with misleading information and should withdraw from the audit.
• D)The PA should try to count the cash as it comes in order to avoid issuing a scope limitation report.

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Definitions:

Accepts Delivery

Refers to the act of receiving goods from a seller or transporter, acknowledging that the delivery meets the terms of the agreement.

Unilateral

Describes actions or agreements made by one party without the necessity for acceptance or agreement from another.

Bilateral

Pertains to a contract or agreement involving two parties who each have obligations towards each other.

Ohio Uniform Commercial Code

A collection of laws that govern commercial transactions in the state of Ohio, part of a larger uniform effort to harmonize the law of sales and other commercial transactions across the United States.