When either the auditor's quantitative (statistical) or qualitative assessments of sample results support the conclusion that the population is materially misstated, _______.
A)professional judgment should be used in deciding on an appropriate course of action
B)the auditor should immediately withdraw from the engagement
C)the auditor should consider notifying the audit committee and SEC
D)the auditor should proceed to issue an unqualified (clean) audit opinion

Question

Quizplus · Accepted Answer

When the auditor's assessment supports a conclusion that the population is materially misstated, professional judgment should be used in deciding on an appropriate course of action to address the misstatement. This may include proposing adjustments, requesting further audit evidence, or modifying the auditor's opinion. The auditor should not withdraw from the engagement without proper justification, and notifying the audit committee and SEC may be necessary in certain circumstances, but it is not always required. Issuing an unqualified audit opinion would be inappropriate if there are material misstatements in the financial statements.

When Either the Auditor's Quantitative (Statistical) or Qualitative Assessments of Sample