ACCA Strategic Professional · Advanced Audit and Assurance (International) · Professional and ethical developments

Delmar LLP audits Quillon Ltd, a non-PIE. The audit partner learns that Quillon's chief accountant has probably been paying bribes to win contracts, and the amounts are likely to be material. The partner believes that the client's management are themselves involved. Which response is most consistent with the Code's NOCLAR provisions?

The auditor should understand the matter, raise it with a management level above those involved or with those charged with governance, assess the response, and then decide whether further action is required. NOCLAR applies to non-PIE audits too, and reporting straight to authorities or relying on the implicated person's assurance is wrong.

1. ASeek to understand the matter and address it with a level of management above those involved, or with those charged with governance, then assess the response and determine whether further action is neededCorrect
2. BReport immediately to the authorities without any discussion, as the Code prohibits discussion with the client
3. CDo nothing, because NOCLAR applies only to PIE audits
4. DObtain written confirmation from the chief accountant that the matter has stopped, and then close the issue