If an auditor discovers a suspected illegal act involving financial statement presentation occurred at a client,the auditor has a duty to:
A) Consult with outside legal counsel to determine if the act is in fact illegal
B) Not mention this suspected misconduct, unless the illegality of the act is, at minimum, determined to be probable
C) Not mention this suspected misconduct, unless the resulting monetary liability can be determined with reasonable certainty
D) Inform the company's Audit Committee

Question

Quizplus · Accepted Answer

The best choice would be to inform the company's Audit Committee, as this is consistent with the auditor's responsibility to communicate fraud and illegal acts to the appropriate level of management or governance. The Audit Committee is well positioned to determine the appropriate course of action and to oversee any investigations that may be required. The auditor may also consider consulting with legal counsel to determine the legality of the act and to advise on any legal implications.

If an Auditor Discovers a Suspected Illegal Act Involving Financial