When an Auditor Becomes Aware of a Possible Illegal Act

question 30

Multiple Choice

When an auditor becomes aware of a possible illegal act by a client,the auditor should obtain an understanding of the nature of the act in order to ________.

• A)evaluate the effect on the financial statements
• B)determine the reliability of management's representations
• C)consider whether other similar acts may have occurred
• D)recommend remedial actions to the audit committee

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Definitions:

Group Development Process

A theoretical model describing the phases groups typically undergo, from formation and storming to norming, performing, and adjourning.

Break The Ice

An expression referring to the act of initiating conversation or activities in a new or awkward situation to create a more relaxed atmosphere.

Organizational Politics

Informal, unofficial, and sometimes behind-the-scenes efforts to sell ideas, influence an organization, increase power, or achieve other targeted objectives.

Leadership Style

The approach and manner in which a leader conducts their leadership, including how they direct, motivate, and manage their team or organization.