During the audit of a new client, the auditor determined that management had given illegal bribes to municipal officials during the year under audit and for several prior years. The auditor notified the clients board of directors, but the board decided to take no action because the amounts involved were immaterial to the financial statements. Under these circumstances, the auditor should

A. Add an explanatory paragraph emphasizing that certain matters, while not affecting the unmodified opinion, require disclosure.

B. Report the illegal bribes to the municipal official at least one level above those persons who received the bribes.

C. Consider withdrawing from the audit engagement and disassociating from future relationships with the client.

D. Issue an except for qualified opinion or an adverse opinion with a separate paragraph that explains the circumstances.

WHY " C " IS CORRECT?

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