When the Auditor Has Reason to Believe an Illegal Act

question 54

Multiple Choice

When the auditor has reason to believe an illegal act has occurred, the auditor should:

• A) inquire of management only at one level below those likely to be involved with the illegality.
• B) begin communication with the FASB in accordance with PCAOB regulations.
• C) consider accumulating additional evidence to determine if there is actually an illegal act.
• D) withdraw from the engagement.

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Definitions:

Positions

The roles or rankings that individuals occupy within a social or organizational structure.

Social Psychologists

Researchers specializing in the scientific study of how people's thoughts, feelings, and behaviors are influenced by the actual, imagined, or implied presence of others.

Think

The process of using reason or mental faculties to consider ideas, make decisions, or reflect on various subjects.

Feel

An experience of emotion or sensation, often used to describe a subjective, internal state.