The auditor notices significant fluctuations in key elements of the company's financial statements.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

If management is unable to provide an acceptable explanation for significant fluctuations in key elements of the company's financial statements, the auditor should perform additional audit procedures to investigate the matter further. This is because these fluctuations could be indicators of potential fraud or errors in the financial statements that need to be addressed. By performing additional audit procedures, the auditor can gather more evidence and make a better-informed decision about the nature and extent of the issues. Therefore, option B is the best choice in this scenario.

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