Which of the following is correct concerning required auditor communications about fraud?
A)Fraud that involves senior management should be reported directly by the auditor to the audit committee regardless of the amount involved.
B)Fraud with a material effect on the financial statements should be reported directly by the auditor to the Securities and Exchange Commission.
C)Any requirement to disclose fraud outside the entity is the responsibility of management and not that of the auditor.
D)The professional standards provide no requirements related to the communication of fraud, but the auditor should use professional judgment in determining communication responsibilities.

Question

Quizplus · Accepted Answer

According to professional standards, fraud involving senior management should be reported directly by the auditor to the audit committee regardless of the amount involved. The auditor should also communicate fraud with a material effect on the financial statements to senior management and the audit committee. However, it is not the responsibility of the auditor to disclose fraud outside the entity. The professional standards provide guidance on required auditor communications about fraud.

Which of the Following Is Correct Concerning Required Auditor Communications