[Broag]

Which of the following is a false statement regarding communications to management and others that fraud or noncompliance with laws and regulations may have occurred?

Incorrect A.

The accountant need not report matters that are clearly inconsequential.

B.

When matters regarding fraud or noncompliance involve senior management, the accountant should report the matter to an individual or group at a higher level with the entity, such as a manager (owner) or the board of directors.

C.

The communication must be in writing.

D.

When matters regarding fraud or noncompliance involve the owner of the business, the accountant should consider resigning from the engagement.

You answered A. The correct answer is C.

The communication regarding fraud or noncompliance with laws and regulations may be oral or written. If the communication is oral, the accountant should document it.

This question may be really easy, I’ve probably just been studying for too long. However, I thought that you’re ALWAYS to report ANY type of fraud to management regardless of its severity. Also, I understand the correct answer, but shouldn’t it be oral “and” written? Not oral “or” written?

Thanks.

REG - 79
FAR - ?
AUD - ?
BEC - ?

[mselaineous]

The question asks which is “false”, so one of the statement is not true. C is not true because it can be either in writing or oral.

FAR - Passed (04/16) ROGER
AUD - Passed (05/16) ROGER & Ninja MCQs
REG - Passed (07/16) ROGER & Ninja MCQs
BEC - 08/16

[Broag]

I thought the communication had to be in writing. Oh well, I read the question wrong. Thank you.

REG - 79
FAR - ?
AUD - ?
BEC - ?

[Anonymous]

However, you should note that if the fraud or issues are communicated verbally/orally that it has to be documented!

[Knight Rider]

The way that I remembered this, is that if the company has some fraud going on…let's not waste time writing about it…pick up the phone and call whomever it needs to be reported to (higher level of mgmt, BoD…etc). Therefore, it can be either oral or written communication. Hope this helps. 😉

Done.

[Author]

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