If an Auditor Discovers That a Suspected Illegal Act Involving

question 15

Multiple Choice

If an auditor discovers that a suspected illegal act involving financialstatement preparation occurred at a client,the auditor has a duty to:

• A) Never inform management to prevent management from potentially engaging in a cover-up
• B) Inform management, unless the auditor suspects that management is involved
• C) Inform the company's Audit Committee
• D) Determine if key client financial personnel were involved in the misconduct

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Definitions:

Confidence Interval Estimate

A confidence interval estimate provides a range of values, derived from sample data, that is likely to contain the value of an unknown population parameter, along with a given level of confidence.

Prediction Interval

A range of values that is likely to contain the value of an unknown parameter for a future observation, with a specified level of confidence.

Expected Value

In probability and statistics, it is the average value obtained from numerous trials of an experiment over an extended period.

Confidence Interval

A compilation of values, resulting from the statistical study of samples, aimed to likely capture the value of an unknown population parameter.