25.An auditor's responsibility for illegal acts by clients that have financial statement impact

1. Is limited to making an inquiry of management about such matters
2. is unrelated to the closeness of the illegal act to the financial reporting process
3. Requires the CPA to assess the risk of material misstatement due to Illegal acts, particularly those illegal acts that are directly associated with financial reporting
4. is limited to understanding the internal controls over compliance with applicable laws