The auditor notices significant fluctuations in key elements of the company's financial report.If management is unable to provide an acceptable explanation, the auditor should:
A)consider the matter a scope limitation.
B)perform additional audit procedures to investigate the matter further.
C)intensify the examination with the expectation of detecting management fraud.
D)withdraw from the engagement.

Question

Quizplus · Accepted Answer

As the auditor has noticed significant fluctuations in key elements of the company's financial report and management is unable to provide an acceptable explanation, the auditor should perform additional audit procedures to investigate the matter further. It is the responsibility of the auditor to obtain sufficient appropriate evidence through audit procedures to reduce audit risk to an acceptably low level. The auditor should also consider the possibility of material misstatement due to error or fraud and assess the risks of material misstatement at the assertion level.

The Auditor Notices Significant Fluctuations in Key Elements of the Company's