Protection Transparency,Inc.is being audited by Messer and Bromely,LLP.During the assessment of fraud,Messer and Bromely discover that the controller has been creating fictional sales and posting them to the general ledger.Who should the auditors make aware of this issue?
A)The chairman of Protection Transparency's audit committee.
B)The local police.
C)Protection Transparency's legal counsel.
D)The predecessor auditor of Protection Transparency.

Question

Quizplus · Accepted Answer

The auditors should inform the chairman of Protection Transparency's audit committee as this is the appropriate authority to oversee the internal control system and the financial reporting process of the company. The audit committee can then take appropriate actions, such as conducting an investigation and informing the management and legal counsel. The police or predecessor auditor may also be involved, but the audit committee should be the initial point of contact.