* Fraud Discovered During an Audit:
* Under ISAs, auditors must communicate findings of fraud to the appropriate governance body, such as the audit committee or board of directors.
* This ensures accountability and allows the organization to take appropriate remedial action.
* Analysis of Other Options:
* A. Confront management:This could compromise the investigation and is not the auditor's role.
* B. Report to regulators:Not immediately required unless legal reporting obligations apply.
* D. Confidentiality:Confidentiality rules allow communication with governance bodies as part of the audit process.
* Conclusion:Reporting findings to the audit committee aligns with ISA requirements and best practices.