The auditor has responsibility regarding a clients noncompliance with laws and regulations. Management may try to hide
Question:
The auditor has responsibility regarding a client’s noncompliance with laws and regulations. Management may try to hide acts involving noncompliance, which limits the auditor’s ability to detect such acts. Which of the following are inherent limitations that affect the auditor’s ability to detect acts involving noncompliance?
a. Laws and regulations often relate to operational issues within the entity that do not necessarily relate to the financial statements, so the information systems relating to financial reporting may not capture noncompliance.
b. Management may act to conceal noncompliance, override controls, or intentionally misrepresent facts to the auditor.
c. The legal implications of noncompliance are ultimately a matter for legal authorities to resolve and are not a matter about which the auditor can resolve.
d. All of the above.
Step by Step Answer:
Auditing A Risk Based Approach
ISBN: 9780357721872
12th Edition
Authors: Karla M Johnstone-Zehms, Audrey A. Gramling, Larry E. Rittenberg