An Auditor Concludes That a Client Has Committed an Illegal

question 44

Multiple Choice

An auditor concludes that a client has committed an illegal act that has not been properly accounted for or disclosed. The auditor should withdraw from the engagement if the

• A) Auditor is precluded from obtaining sufficient competent evidence about the illegal act
• B) Illegal act has an effect on the financial statements that is both material and direct
• C) Auditor cannot reasonably estimate the effect of the illegal act on the financial statements
• D) Client refuses to take the remedial steps deemed necessary by the auditors

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Definitions:

Symbolically Represent

The act of using symbols or symbolic actions to convey deeper meanings or abstract concepts.

Observed Behavior

The actions or reactions of an individual or group that are visible and can be recorded or noted.

Self-administered Reinforcement

A behavior modification technique where individuals give themselves rewards or punishments to increase or decrease certain behaviors.

Reward

An item, event, or outcome that increases the likelihood of a behavior being repeated, crucial in the processes of learning and conditioning.