An auditor concludes that a client has committed an illegal act that has not been properly accounted for or disclosed. The auditor should withdraw from the engagement if the
A) Auditor is precluded from obtaining sufficient competent evidence about the illegal act
B) Illegal act has an effect on the financial statements that is both material and direct
C) Auditor cannot reasonably estimate the effect of the illegal act on the financial statements
D) Client refuses to take the remedial steps deemed necessary by the auditors

Question

Quizplus · Accepted Answer

If the client refuses to take the necessary remedial steps after an illegal act is identified, the auditor may need to withdraw from the engagement to avoid association with misleading financial statements.

An Auditor Concludes That a Client Has Committed an Illegal