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6. When auditing financial statements and finding indications of a possible misa

ID: 2337054 • Letter: 6

Question

6. When auditing financial statements and finding indications of a possible misappropriation of assets, independent auditors should first: (a) Immediately report the misappropriation to those individuals charged with governance of the organization so they can take appropriate action. Determine the methods by which the misappropriation was carried out. Identify a person(s) who are likely responsible for the misappropriation and obtain evidence about some other fraud indications in their work. Determine which accounts are affected and the amount by which they are overstated or understated. (b) (c) (d)

Explanation / Answer

Option--D

Determine which accounts are affected and the amount by Which they are overstated or understated