If material fraud perpetrated by management is discovered by the auditor,the nature of the fraud should always be reported directly to:
A)the PCAOB
B)the SEC
C)the FBI
D)the audit committee of the company

Question

Quizplus · Accepted Answer

The auditor should report the material fraud directly to the audit committee of the company, as it is the responsibility of the audit committee to oversee the financial reporting process and address any issues related to fraud or financial statement misrepresentation. Reporting to other agencies such as the PCAOB, SEC, or FBI may also be necessary but should be done after reporting to the audit committee.

If Material Fraud Perpetrated by Management Is Discovered by the Auditor,the