CFE – Fraud Prevention and Deterrence — Question 39

Evangelique is a government auditor. During an audit of a public-sector organization’s financial statements, she uncovers evidence of a potential fraud. Which of the following is TRUE regarding Evangelique’s responsibility to report these findings?

Answer options

• A. Evangelique’s reporting requirements are substantially the same as those for external auditors in the private sector
• B. Evangelique’s reporting requirements depend on the jurisdiction of the entity and the specific audit mandate
• C. Evangelique is legally prohibited from reporting the findings to any party outside the organization being audited
• D. Evangelique must comply with the reporting requirements laid out in the global auditing standards that apply to all government auditors

Correct answer: D

Explanation

The correct answer is D because government auditors like Evangelique are required to follow established global auditing standards, which dictate how to report findings. Option A is incorrect as the requirements for government auditors can differ significantly from those for private sector auditors. Option B is misleading because, while jurisdiction can influence reporting, it does not override the necessity to comply with global standards. Option C is false as auditors typically have a duty to report fraud findings to the appropriate authorities.