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.

---

Definitions:

Suggestions and Productivity

Proposals or ideas that can lead to improvements in efficiency, effectiveness, or output within an organization or process.

Social Networking Activity

Engagement with platforms that allow users to create and share content or to participate in social networking.

Policy Guidelines

Written principles that provide a framework for decision-making and actions within an organization.

Cisco Systems

A multinational technology conglomerate headquartered in the United States, specializing in networking hardware, software, and telecommunications equipment.