The auditors' responsibility to communicate findings with respect to fraud can best be summarized as:
A)Communicate to the audit committee both material and immaterial amounts of fraud
B)Communicate to the audit committee both material and immaterial amounts of fraud that are detected
C)Communicate to the SEC material amounts of fraud
D)Communicate to the SEC both material and immaterial amounts of fraud that are detected

Question

Quizplus · Accepted Answer

The auditor's responsibility to report findings of fraud requires them to communicate both material and immaterial amounts of fraud detected to the audit committee. Reporting to the SEC is required only for material fraud, but communication of both material and immaterial fraud is necessary for the proper governance and control of the entity. Therefore, choice B is the best answer.

The Auditors' Responsibility to Communicate Findings with Respect to Fraud