Final answer:
If auditors withdraw from an engagement, they inform both the level of management and those charged with governance, providing reasons for the withdrawal. These communications are critical for transparency and maintaining professional standards. Option C and D are incorrect as they do not align with the professional conduct expected of auditors.
Step-by-step explanation:
If auditors withdraw from an engagement, the correct answer is A. They will inform the appropriate level of management or those charged with governance and provide reasons for the withdrawal. When auditors decide to withdraw from an audit engagement, professional standards and ethical considerations require them to communicate their reasons to the appropriate parties within the client organization. This action is important to ensure transparency and to maintain professional integrity.
The auditor's communication should include both the management and those charged with governance, such as the board of directors or audit committee. This is because these parties have different roles and responsibilities within the organization and both need to be informed about significant decisions like an auditor's withdrawal. Additionally, the auditor should provide a clear and detailed explanation for their withdrawal, which may include professional, ethical, or legal issues discovered during the audit process.
Option C is incorrect because the auditor must communicate with the client about their withdrawal; immediate cessation of communication is not appropriate. Option D is also incorrect, as auditors are typically entitled to be compensated for the services they have performed up until the point of withdrawal.