When an auditor becomes aware of possible noncompliance by a client, the auditor should obtain an understanding of the nature of the act to:
A)evaluate the effect on the financial statements.
B)determine the reliability of management's representations.
C)consider whether other similar acts may have occurred.
D)recommend remedial actions to the audit committee.

Question

Quizplus · Accepted Answer

The auditor needs to understand the nature of the noncompliance to evaluate its effect on the financial statements, as it may impact the auditor's opinion or require disclosure.

When an Auditor Becomes Aware of Possible Noncompliance by a Client