When material fraud is detected by the auditor during the course of audit, and he is of the opinion that the same if goes un-corrected shall have a impact on opinion expressed in the audit report, he is required to intimate the same to board of directors who shall inform the same to securities exchange commission (SEC) within one business day. On failure of the board of directors to report the same to SEC, auditor shall inform the same to SEC within one business day. To select: The correct option.

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Chapter 20, Problem 20.23MCQ

To determine

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When material fraud is detected by the auditor during the course of audit, and he is of the opinion that the same if goes un-corrected shall have a impact on opinion expressed in the audit report, he is required to intimate the same to board of directors who shall inform the same to securities exchange commission (SEC) within one business day.

On failure of the board of directors to report the same to SEC, auditor shall inform the same to SEC within one business day.

To select: The correct option.

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