The most likely explanation why the auditor's examination cannot reasonably be expected to bring all illegal acts by the client to the auditor's attention is that:

Question

Quizplus · Accepted Answer

Choice "B" is correct. The audit should be designed to identify material misstatements due to illegal acts, but illegal acts that relate to operating aspects rather than accounting aspects may not directly affect the financial statements, and therefore they may be less likely to be discovered by the auditor. Choice "A" is incorrect. The audit should be designed to identify material misstatements due to illegal acts, even if they are caused by management override of (its own) internal control. Choice "C" is incorrect. The audit should be designed to identify material misstatements due to illegal acts, even when minimal substantive testing is performed by the auditor due to a very strong system of internal control. Choice "D" is incorrect. The audit should be designed to identify material misstatements due to illegal acts, even when those illegal acts were perpetrated by the only person with access to both assets and the accounting records.

The Most Likely Explanation Why the Auditor's Examination Cannot Reasonably