When reporting identified or suspected noncompliance,
A) the auditor must report inconsequential noncompliance to the audit committee.
B) the auditor should communicate all material noncompliance matters to those charged with governance.
C) any intentional noncompliance must be reported to local law enforcement.
D) all noncompliance, whether material or not, must result in a disclaimer of opinion.

Question

Quizplus · Accepted Answer

As per auditing standards, the auditor should communicate all identified or suspected material noncompliance matters to those charged with governance, such as the audit committee. Inconsequential noncompliance need not be communicated but should be documented. Reporting to law enforcement is not required, but the auditor may have a legal or regulatory obligation to report certain matters. Issuing a disclaimer of opinion is not necessary for all noncompliance matters, as it depends on their significance and effect on the financial statements.

When Reporting Identified or Suspected Noncompliance