When an External Auditor Suspects That Personnel at an Audit

question 26

Multiple Choice

When an external auditor suspects that personnel at an audit client have committed an illegal act,the auditor has a duty to:

• A) Evaluate whether top management explicitly or implicitly authorized the act
• B) Ignore the act if it concludes that the act has no financial statement effect
• C) Confront the particular person suspected of committing the offending act
• D) Report the act to the SEC of the audit client is a public company

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Definitions:

Inguinal Canal

Passage through the lower abdominal wall that transmits the spermatic cord in the male and the round ligament in the female.

Wolffian Ducts

Embryonic structures in males that develop into the epididymis, vas deferens, and seminal vesicles.

Urogenital Folds

Urogenital Folds are embryonic structures that form part of the genitalia, developing into the outer parts of the vagina in females and encasing the urethra in males.

Urethral Groove

The groove found along the underside of the penis or within the genital area, where the urethra is positioned in certain developmental stages or conditions.