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:

Motor Response

The physical reaction of a body part when stimulated, as part of the nervous system's activity.

Pediculosis

An infestation of lice on the human body, characterized by itching and irritation on the scalp, body, or genital area.

Integumentary Assessment

A clinical evaluation of the skin and its appendages, including hair and nails, to detect conditions or diseases.

Head Lice

Parasitic insects found on the human scalp, feeding on blood and causing itching and irritation, typically spread through close personal contact.