Responsibilities for Discovering Illegal Acts Direct-Effect Illegal Acts(same as errors irregs) Indirect-Effect Illegal Acts(No assurance) Evidence accumulation when there is no reason to Believe Indirect-Effect Illegal Acts exist(no resp Evidence Accumulation and other actions when There is Reason to believe direct-or Indirect-Effect Illegal acts May exist(inquire, consult, consider more evidence) Actions when the auditor Knows of an Illegal Act(consider f/s Effect, BODS/Audit Cte, collect sufficient evidence) Arens, Loebbecke, Auditing, 8/E @2000 Prentice Hall. InArens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. Responsibilities for Discovering Illegal Acts • Direct-Effect Illegal Acts (same as errors & irregs) • Indirect-Effect Illegal Acts (No assurance) • Evidence Accumulation When There is No Reason to Believe Indirect-Effect Illegal Acts exist (no resp.) • Evidence Accumulation and Other Actions When There is Reason to Believe Direct - or Indirect-Effect Illegal Acts May Exist (inquire, consult, consider more evidence) • Actions when the Auditor Knows of an Illegal Act (consider f/s Effect, BOD’s/Audit Cte., collect sufficient evidence)