Who should the auditors first notify if they discover a material misappropriation of assets?

Question

Quizplus · Accepted Answer

The auditors should first notify the audit committee of the company if they discover a material misappropriation of assets. This is because the audit committee is responsible for oversight of financial reporting and should be made aware of any fraud or illegal activities by management. The auditors may also need to notify the SEC or other regulatory bodies if the misappropriation is significant enough, but the audit committee should be the first to know.

Who Should the Auditors First Notify If They Discover a Material