During the audit of Tasman Oil NL, the engagement team discovers that Tasman has illegally buried 80 000 litres of sludge in the field behind its refinery. The auditors will assess Tasman's treatment of the illegality in the financial reports and related disclosures and possibly draw attention to it in the audit report.

Question

Quizplus · Accepted Answer

Auditors are responsible for assessing the implications of illegal acts discovered during an audit on the financial statements and the adequacy of related disclosures. If the act has a material effect on the financial statements, auditors may need to draw attention to it in their report or modify their opinion, depending on the circumstances.

During the Audit of Tasman Oil NL, the Engagement Team