If the auditor determines that the company does not comply with relevant laws and regulations,the auditor
A)should report the noncompliance to management or those charged with governance
B)must report the noncompliance to management or those charged with governance
C)should determine whether he has a responsibility to report the noncompliance to outside parties
D)should report the noncompliance to outside parties
E)must report the noncompliance to outside parties
F)both B and C
G)both C and E
H)both D and E

Question

Quizplus · Accepted Answer

According to auditing standards, if the auditor determines that the company does not comply with relevant laws and regulations, the auditor should report the noncompliance to management or those charged with governance (Choice A) and must report the noncompliance to management or those charged with governance (Choice B). However, the auditor should also determine whether he has a responsibility to report the noncompliance to outside parties (Choice C). Therefore, the best choice is F because it includes both options B and C. The auditor is not required to report the noncompliance to outside parties (Choice E) but may choose to do so depending on the circumstances.

If the Auditor Determines That the Company Does Not Comply