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      Question

      An auditor finds material misstatements due to fraud but

      the management refuses to take corrective action. What should be the auditorโ€™s next step?
      A Modify the audit opinion Correct Answer Incorrect Answer
      B Withdraw from audit silently Correct Answer Incorrect Answer
      C Inform the tax department Correct Answer Incorrect Answer
      D Take no further action Correct Answer Incorrect Answer

      Solution

      If fraud is not rectified, the auditor must modify the opinion in accordance with SA 705.

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