When an auditor believes that an illegal act may have occurred, the first step he or she should take is to gather additional evidence to determine the extent of the illegality.

Question

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When an auditor suspects an illegal act, he or she should gather additional evidence to determine the extent of the illegality. This is because the auditor has a responsibility to report any illegal acts to the appropriate authorities. However, the auditor should not investigate the matter further without consulting with legal counsel and management to avoid compromising any legal actions that may be taken.

When an Auditor Believes That an Illegal Act May Have