A Staff Auditor, Nearly Finished with an Audit Engagement, Discovers

Multiple Choice

A staff auditor, nearly finished with an audit engagement, discovers that the director of marketing has a gambling habit. The gambling issue is not directly related to the existing engagement and there is pressure to complete the current engagement. The auditor notes the problem and forwards the information to the chief audit executive but performs no further follow-up. The auditor's actions would:

A) Be in violation of the IIA Code of Ethics for withholding meaningful information. II. Be in violation of the Standards because the auditor did not properly follow up on a red flag that might indicate the existence of fraud. III. Not be in violation of either the IIA Code of Ethics or Standards.
B) I only
C) II only
D) III only
E) I and II only