Which of the following statements is correct concerning an auditor\'s responsibi

Question

Which of the following statements is correct concerning an auditor's responsibility to report fraud?
A. The auditor is required to communicate to the client's audit committee all minor fraudulent acts perpetrated by low-level employees, even if the amounts involved are inconsequential.
B. The disclosure of material management fraud to principle stockholders is when senior management and the board of directors fail to acknowledge the fraudulent activities.
C. Fraudulent activities involving senior management of which the auditor becomes aware should be reported directly to the SEC.
D. The disclosure of fraudulent activities to parties other than the client's senior management and its audit committee is not ordinarily part of the auditor's responsibility.

Explanation / Answer

C. Fraudulent activities involving senior management of which the auditor becomes aware should be reported directly to the SEC.

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