Your employer is a social media company. In performing the company's audit, you find evidence that the client failed to comply with a state regulation. Under which instance would the client's failure be considered possible noncompliance with laws and regulations (NOCLAR)?

The individual who failed to comply with the regulation was the vice chair of the company's board.

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The client's failure to comply does not fit within the scope of the NOCLAR interpretation.

The individual who failed to comply with the regulation was a contractor, not an employee.

The client's failure to comply with the regulation is clearly inconsequential.