When a Client Engages in Transactions Involving Derivatives,the Auditor Should

Multiple Choice

When a client engages in transactions involving derivatives,the auditor should:

A) Review agreements underlying the derivative.
B) Confirm with the client's broker whether the derivatives are for trading purposes.
C) Notify the audit committee about the risks involved in derivative transactions.
D) Add an explanatory paragraph to the auditor's report describing the risks associated with each derivative.