An auditor who finds that the client has committed an illegal act would be most likely to withdraw from the engagement when the:
A)illegal act affects the auditor's ability to rely on management representations.
B)illegal act has material financial report implications.
C)illegal act has received widespread publicity.
D)auditor cannot reasonably estimate the effect of the illegal act on the financial report.

Question

Quizplus · Accepted Answer

It is the responsibility of the auditor to report any illegal acts committed by the client to the appropriate authorities. However, if the illegal act affects the auditor's ability to rely on management representations, which are essential to the audit process, the auditor may need to withdraw from the engagement. This can happen when the illegal act undermines the integrity of the financial records, or when the client is not willing to cooperate with the auditor in investigating the matter. In such cases, the auditor may not be able to complete the audit in a satisfactory manner, and withdrawing from the engagement may be the best course of action.

An Auditor Who Finds That the Client Has Committed an Illegal