What is the auditor supposed to do first if he believes that an illegal act occurred?

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By Martinek Paul J.2007-01-09T00:00:00

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What should the auditor do first when in an audit of a client entity an illegal act has been identified?

The auditor should consider the effect of an illegal act on the amounts presented in financial statements including contingent monetary effects, such as fines, penalties and damages.

When an auditor believes that an illegal act may have occurred?

When the auditor has reason to believe an illegal act has occurred, the auditor should: A] inquire of management only at one level below those likely to be involved with the illegality.

When an auditor becomes aware of a possible illegal act the auditor should?

. 10 When the auditor becomes aware of information concerning a possible illegal act, the auditor should obtain an understanding of the nature of the act, the circumstances in which it occurred, and sufficient other information to evaluate the effect on the financial statements. . . .

What is the auditor responsibility when noncompliance?

The auditor's responsibility regarding mis- statements resulting from noncompliance with laws and regulations having a direct effect on the determination of material amounts and disclosures in the financial statements is the same as that for misstatements caused by fraud or error, as described in section 200.

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