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Riley, a member in industry, is the CFO of Deutsch Sales, Inc. The firm of Morgan & Francone, CPA's is performing an audit of the

Riley, a member in industry, is the CFO of Deutsch Sales, Inc. The firm of Morgan & Francone, CPA's is performing an audit of the company for the year ended June 30, 20X6. Morgan & Francone, CPA's is about to conclude the audit engagement and issue their report on the June 30, 20X6 financial statements. Riley is aware that a number of irregularities exist in the company's books and records that would materially and negatively affect the company's financial position and results of operations for the audited year. However, the firm did not ask Riley specifically about these irregularities or request any information that would relate to them. What is Riley's obligation to inform Morgan & Francone, CPA's regarding these irregularities?

  • a) The concept of "don't ask, don't tell" applies here. If the firm did not ask, Riley has no obligation to inform them.
  • b) Yes, Riley must disclose the information to the firm.
  • c) Riley cannot disclose the information as it would be an act of insubordination against her employer.
  • d) Only if Riley signed the representation letter would she be obligated to disclose the information

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