Spotting Trouble: How Auditors Address Illegal Acts (Course Id 2887)

1. Who is this course for?
 This course is designed for anyone needing Continuing Professional Education (CPE), particularly CPAs, accountants, auditors, and professionals seeking to strengthen their understanding of how auditors address possible illegal acts during an audit.

2. What is this course about or what problem does this course solve?
 This course explains auditors’ responsibilities when identifying, evaluating, responding to, and communicating potential or detected illegal acts, helping professionals apply appropriate audit procedures and comply with relevant auditing standards.

3. Where can the knowledge from this course be used?
 The knowledge gained can be applied in financial statement audits, audit engagements, compliance reviews, internal control evaluations, and communications with management and audit committees regarding legal and regulatory issues.

4. Why is this course important to a CPA or Accountant?
 This course is important because it helps CPAs and accountants understand how illegal acts may affect financial statements, how to recognize warning signs, and how to respond and document findings in accordance with professional auditing guidance, including PCAOB AS 2405 and Auditing Interpretation AI 13.

5. When is this course relevant or timely?
 This course is relevant whenever auditors are planning or performing audit procedures, evaluating audit evidence, assessing potential legal or regulatory violations, or determining the appropriate response to possible illegal acts discovered during an engagement.

6. How is a course like this consumed or used?
 This self-study text course is completed independently by reviewing the course materials, working through review questions, and successfully passing the final exam with a score of at least 70% within one year of purchase to earn CPE credit.

This course outlines the responsibilities auditors have when addressing possible illegal acts during an audit. It covers the definition of illegal acts in the audit context, how such acts may affect financial statements, and the practical limits of what auditors can detect. Major topics include recognizing signs of violations, evaluating their impact, responding appropriately when issues arise, and communicating with management and the audit committee. Learners will understand how to apply professional judgment, document findings, and follow procedures that align with auditing standards, including guidance from PCAOB AS 2405 and Auditing Interpretation AI 13. The course also discusses the intersection of internal controls and legal compliance, providing practical examples to illustrate key concepts. 

Course Learning Objectives

Upon completion of this chapter, you will be able to: