An auditor who discovers that client employees have committed an illegal act that has a material effect on the client's financial statements most likely would withdraw from the engagement if:
A)the illegal act is a violation of generally accepted accounting principles.
B)the client does not take the remedial action that the auditor considers necessary.
C)the illegal act was committed during a prior year that was not audited.
D)the auditor has already assessed control risk at the maximum level.

Question

Quizplus · Accepted Answer

If the client does not take the remedial action that the auditor considers necessary, it indicates that management is not willing to take its responsibility seriously and may pose a threat to the auditor's independence. Therefore, the auditor would withdraw from the engagement as a result of such an unethical behavior by the client.

An Auditor Who Discovers That Client Employees Have Committed an Illegal