When the auditor identifies or suspects noncompliance with laws and regulations, the auditor
A) should discuss the matter with those whom they believe committed the illegal act.
B) should begin communication with the FASB in accordance with regulations.
C) may disclaim an opinion on the basis of scope limitations if he or she is precluded by management from obtaining sufficient appropriate evidence.
D) should withdraw from the engagement.

Question

Quizplus · Accepted Answer

The auditor may disclaim an opinion on the basis of scope limitations if he or she is precluded by management from obtaining sufficient appropriate evidence. The auditor should also communicate the matter with those charged with governance to determine appropriate action to address the noncompliance. The auditor should not discuss the matter with those whom they believe committed the illegal act, begin communication with the FASB, or withdraw from the engagement without sufficient cause.

When the Auditor Identifies or Suspects Noncompliance with Laws and Regulations