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Ken Garrett.
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ketki15
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If an external auditor in the process of considering the company’s financial statements came across an incident of fraud that took place in the year, he/she must
a- qualify the accounts regardless of the size of the fraud
b- report to the shareholders by the way of a note to the accounts, regardless of the size of the fraud
c- qualify the accounts only if the fraud is material and not properly recorded in the accounts
d- report to the shareholders by a note to accounts, but only if fraud is materialwhy is the correct ans C? why would the auditor qualify the accounts if there is a fraud?
Ken Garrett
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c qualify the accounts only if the fraud is material and not properly recorded in the accounts
For audit qualifications to occur, the misstatement has to be material. Here is it has not been properly recorded in the FS so they are materially wrong.
ketki15
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