Question

In reporting under Government Auditing Standards, an auditor most likely would be required to communicate management's misappropriation of assets directly to a federal inspector general when the fraudulent activities are:

a. Significant and material
b. Immaterial and inconsequential
c. Outside the scope of the audit
d. Discovered after the reporting date

Answer 1

An auditor must report management's misappropriation of assets to a federal inspector general when the activities are significant and material, as they indicate a potentially serious violation of the law.

Step-by-step explanation:

In the context of Government Auditing Standards, an auditor is most likely required to report management's misappropriation of assets directly to a federal inspector general when the fraudulent activities are significant and material. This is due to the serious implications such actions may have on the integrity of financial reports and the potential misuse of public funds. It is essential for auditors to evaluate the severity and impact of the misappropriation to determine the necessity of reporting. In situations where the misappropriation is material to the financial statements or operations, it could indicate a serious or flagrant problem, potentially a violation of the law, thus necessitating immediate reporting to oversight bodies such as the federal inspector general.

Employers are responsible for withholding the correct amounts for tax deductions from their employees' wages and also contribute to taxes based on an employee's pay, including the funding of social security and insurance programs.