An audit client is notified that the client is not in compliance with a number of pension laws and regulations. In this situation, the auditor is not required to obtain sufficient appropriate evidence of the impact of this noncompliance on the financial statements.

Question

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The auditor is required to obtain sufficient appropriate evidence of the impact of noncompliance with pension laws and regulations on the financial statements. Ignoring or not investigating this matter could result in a material misstatement of the financial statements.

An Audit Client Is Notified That the Client Is Not