* Implications of Management Manipulation:
* Intentional manipulation, even if quantitatively immaterial, raises concerns about the reliability of management representations and the integrity of audit evidence.
* Why Option A is Correct:
* Reassessing the reliability of previously obtained evidence ensures that the auditors address potential biases or systemic issues arising from management's actions.
* Analysis of Other Options:
* B. Withdrawing from the audit:Premature unless the issue is pervasive.
* C. Legal definition of fraud:Auditors are not required to meet this threshold for assessing evidence.
* D. Quantitative materiality:Misstatements can be qualitatively material if they indicate intentional manipulation.
* Conclusion:The auditors must reconsider the reliability of evidence due to the qualitative implications of management's actions.