If noncompliance with a law is discovered during the audit of a publicly held company,the auditors should first:
A)Notify the regulatory authorities.
B)Determine who was responsible for the noncompliance.
C)Intensify the examination to identify noncompliance with any laws.
D)Report the act to those in charge of governance within the client's organization.

Question

Quizplus · Accepted Answer

The first action of the auditors should be to report the noncompliance act to those in charge of governance within the client's organization. This is in line with the standards of reporting improvements made by the Public Company Accounting Oversight Board (PCAOB). The board requires auditors to communicate noncompliance with laws and regulations discovered during audits to those responsible for governance within the client organization.

If Noncompliance with a Law Is Discovered During the Audit