When an external auditor suspects that personnel at an audit client have committed an illegal act,the auditor has a duty to:
A) Evaluate whether top management explicitly or implicitly authorized the act
B) Ignore the act if it concludes that the act has no financial statement effect
C) Confront the particular person suspected of committing the offending act
D) Report the act to the SEC of the audit client is a public company

Question

Quizplus · Accepted Answer

The auditor should evaluate whether top management authorized the act to assess the potential impact on the financial statements and the integrity of management.

When an External Auditor Suspects That Personnel at an Audit