An auditor who discovers that a client's employees paid small bribes to municipal officials most likely would withdraw from the engagement if
A) The payments violated the client's policies regarding the prevention of illegal acts.
B) The client receives financial assistance from a federal government agency.
C) Documentation that is necessary to prove that the bribes were paid does not exist.
D) Management fails to take the appropriate remedial action.

Question

Quizplus · Accepted Answer

If the auditor discovers that the client's employees paid small bribes to municipal officials, it is the client's responsibility to take appropriate remedial action, such as investigating the circumstances of the payments, reporting them to appropriate authorities and taking disciplinary action against the employees involved. If management fails to take these actions, the auditor would likely withdraw from the engagement because the client is not taking adequate steps to prevent this illegal behavior from occurring again in the future. The other options (A, B, and C) do not necessarily require the auditor to withdraw from the engagement.

An Auditor Who Discovers That a Client's Employees Paid Small