When an auditor knows that an illegal act has occurred,she must
A)report it to the proper governmental authorities.
B)consider the effects on the financial statements,including the adequacy of disclosure.
C)withdraw from the engagement.
D)issue an adverse opinion.

Question

Quizplus · Accepted Answer

The auditor must consider the effects of the illegal act on the financial statements and ensure that there is adequate disclosure. Reporting to authorities or withdrawing from the engagement are not immediate requirements unless the illegal act significantly impacts the financial statements or the auditor's ability to continue the engagement.

When an Auditor Knows That an Illegal Act Has Occurred,she