If management makes appropriate adjustments,but does not take appropriate steps to modify internal control in order to rectify the problem of fraud discovered in a financial statement audit,the decision has a direct impact on:
A)the audit opinion on the financial statements.
B)the client company's stock price.
C)the auditor's perception of the overall control environment.
D)all previous work performed by the auditor for competing companies.

Question

Quizplus · Accepted Answer

If management fails to modify internal controls after discovering fraud, it affects the auditor's perception of the control environment, potentially leading to a more cautious or skeptical approach in future audits.

If Management Makes Appropriate Adjustments,but Does Not Take Appropriate Steps