.If specific information comes to an auditor's
attention that implies the existence of
possible illegal acts that could have a material, but indirect effect on-the financial
statements, the auditor should next
a. Report the matter to an appropriate level
of management at least one level above
those involved.
b. Apply audit procedures specifically
directed to ascertaining whether an
illegal act has occurred.
c. Seek the advice of an informed expert
qualified to practice law as to possible
contingent liabilities.
d. Discuss the evidence with the client's
audit committee, or others with
equivalent authority.
attention that implies the existence of
possible illegal acts that could have a material, but indirect effect on-the financial
statements, the auditor should next
a. Report the matter to an appropriate level
of management at least one level above
those involved.
b. Apply audit procedures specifically
directed to ascertaining whether an
illegal act has occurred.
c. Seek the advice of an informed expert
qualified to practice law as to possible
contingent liabilities.
d. Discuss the evidence with the client's
audit committee, or others with
equivalent authority.