Question

An auditor who discovers that a client's employees paid small bribes to municipal officials most likely would withdraw from the engagement if:

A) the payments violated the client's policies regarding the prevention of illegal acts.

B) the client receives financial assistance from a federal government agency.

C) documentation that is necessary to prove that the bribes were paid does not exist.

D) management fails to take the appropriate remedial action.

Answer 1

If an auditor discovers that a client's employees paid bribes to municipal officials, they would most likely withdraw from the engagement if management fails to take the appropriate remedial action.

Step-by-step explanation:

If an auditor discovers that a client's employees paid small bribes to municipal officials, they would most likely withdraw from the engagement if management fails to take the appropriate remedial action. While other options such as the client violating their policies regarding the prevention of illegal acts, receiving financial assistance from a federal government agency, or lacking documentation to prove the bribes were paid can also be significant, the failure of management to address the issue indicates a lack of commitment to addressing unethical behavior.

For example, if the client's management does not take the appropriate remedial action, it suggests that they are not willing to rectify the situation and prevent future illegal acts. This can put the auditor at risk of being associated with a client involved in unethical practices and can also compromise their professional integrity and reputation.