Under the Private Securities Litigation Reform Act, if an auditor concludes that an illegal act with a material effect on the financial statements has been reported to, but not dealt with by senior management, the auditor should then report his/her conclusions to
A) The Securities and Exchange Commission
B) The company's board of directors
C) The office of the controller/comptroller for the appropriate state
D) The Federal Bureau of Investigation

Question

Quizplus · Accepted Answer

According to the Private Securities Litigation Reform Act, if an auditor concludes that an illegal act with a material effect on the financial statements has been reported to, but not dealt with by senior management, the auditor should report his/her conclusions to the company's board of directors. It is then the responsibility of the board of directors to take appropriate action in response to the auditor's findings. Reporting to the Securities and Exchange Commission or other government agencies may be necessary in certain circumstances, but the auditor's first step should be to report to the company's board of directors.

Under the Private Securities Litigation Reform Act, If an Auditor