ACFE Exam CFE-Fraud-Prevention-and-Deterrence Topic 2 Question 64 Discussion

Actual exam question for ACFE's CFE-Fraud-Prevention-and-Deterrence exam

Question #: 64
Topic #: 2

[All CFE-Fraud-Prevention-and-Deterrence Questions]

During an external audit of an organization's financial statements. Peter, the external auditor, uncovers significant internal control deficiencies at the audit client's organization. He believes these deficiencies could result in a material misstatement of the financial statements. Which of the following should Peter do with regard to these findings?

APeter should make a public announcement that he is withdrawing from the audit engagement.

BPeter should provide a written communication about the findings to those charged with governance.

CPeter should report the findings in writing directly to the appropriate regulatory agencies

DPeter should discreetly work with senior management to correct the underlying internal control deficiencies.

Show Suggested Answer

Suggested Answer: B

by Janine at Mar 30, 2023, 08:06 PM

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Rosalind

1 months ago

I'm going with Option C. Reporting the findings directly to regulatory agencies is the best way to ensure these issues are taken seriously and properly addressed.

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Elfriede

1 months ago

Option D might be tempting, but it's not the right way to go. Peter shouldn't be secretly working with management, that could be seen as collusion.

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Asha

4 days ago

Peter should communicate the deficiencies to the audit committee or those charged with governance.

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Catalina

7 days ago

Peter should consider issuing a qualified opinion on the financial statements.

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Lauran

15 days ago

Peter should discuss the deficiencies with the audit client's management.

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Wilford

2 months ago

I agree with Option B. Peter needs to let the appropriate people within the organization know about these internal control issues so they can be addressed properly.

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Daron

14 days ago

Option C: Peter should keep the deficiencies to himself and not disclose them to anyone.

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Ahmed

14 days ago

Option B: Peter should communicate the deficiencies to the appropriate levels of management within the organization.

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Glenn

22 days ago

Option A: Peter should ignore the deficiencies and continue with the audit.

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Glenna

2 months ago

Whoa, Option A? That's like throwing the baby out with the bathwater. Peter shouldn't be making any public announcements, that's just going to cause chaos.

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Phil

6 hours ago

Peter should communicate the deficiencies to the audit committee or those charged with governance.

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Leonardo

2 days ago

Peter should consider the impact of the deficiencies on the financial statements and determine if adjustments are necessary.

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Effie

2 days ago

Peter should discuss the deficiencies with management and request additional information.

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Lawrence

5 days ago

Peter should evaluate the severity of the deficiencies and consider the need to modify the audit opinion.

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Buck

9 days ago

Peter should communicate the deficiencies to the audit committee and discuss the potential implications.

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Glory

14 days ago

Peter should consider the impact of the deficiencies on the financial statements and determine if adjustments are necessary.

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Ashley

1 months ago

Peter should discuss the deficiencies with management and request additional information.

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Lenny

2 months ago

Option B seems like the most appropriate course of action. Communicating the findings to those charged with governance is the ethical and professional way to handle this situation.

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