An Auditor Concludes That a Client Has Committed an Illegal

Multiple Choice

An auditor concludes that a client has committed an illegal act that has not been properly accounted for or disclosed. The auditor should withdraw from the engagement if the:

A) Auditor is precluded from obtaining sufficient appropriate evidence about the illegal act.
B) Illegal act has an effect on the financial statements that is both material and direct.
C) Auditor cannot reasonably estimate the effect of the illegal act on the financial statements.
D) Client refuses to accept the auditor's report as modified for the illegal act.