 pretty much useless to the company. So at that point in time, if there's no agreement on the action that the management should do in order to put the financial statements, we might have to also just disengage from the engagement at that point in time. I mean, if it comes down to giving an adverse opinion or disengaging, oftentimes it ends up in a disengagement at that point in time. So if auditor decides that the misstatement is or may be the result of fraud and that the effect may be material, the auditor should then obtain audit evidence to determine whether material fraud has occurred and the effect. So we're gonna dig down into the fraud to see if it has a material effect. And notice our focus here is really on the financial statements. It's not necessarily on the fraud in and of itself. It's on what is the nature of the fraud that we wanna dive into is what's gonna be the effect on the financial statements. Because of course our goal here is to make an opinion on the financial statements and the reporting of it, not necessarily as it would be in say a criminal type case. So if we're auditing from a forensic type of situation to look for a criminal type of act or fraud type of activity, we will pursue that. But notice where our aim is. Our goal is that trying to see what the financial statements and if the financial statements are presented fairly, our primary purpose, that's what we are engaged to do. Think about implication to other areas of the audit. So if there's a fraud here, does this have implications elsewhere? And one way we might do that, if it's lower management, if it's lower employees that committed the fraud or something, even if it's substantial, then the question is, well, what other types of areas do they have influence over? Possibly not many because of internal controls, because of separation of duties. If the fraud on the other hand is in upper levels of management, again, that then gives us pause. We're saying, well, now it's possible if there's fraud at that level of misrepresentation or misstatement, then it could be more pervasive because they have more influence, whereas lower level people have restrictions due to separation of duties. So we wanna think about what does this fraud have a result on other areas of the financial statement and the credibility of the audit evidence that we have in the financial statements as a whole. Discuss the issue and plan to approach it further with the appropriate level of management, at least one level above those involved in committing the fraud and with senior management. So if we detect fraud, then of course, we're gonna discuss it with someone. Most of the time, the fraud is employees and oftentimes some type of beneficial to the employees, some type of theft or something like that. And if that's the case, then of course, we talk to the proper level of management, possibly one step removed, not the level right above, but the one above that, and then upper management. And again, that's hopefully something that can then be detected at that level and taken care of within the organization and not give us questions about the integrity of the upper level management, hopefully, which would be more problematic. Suggest the management, consult with legal counsel. So we're always gonna basically say, hey, our objective here is to see that the financial statements are reported and free of material misstatement. You have, if you have some type of fraud or illegal activity happening here, fraud being an illegal activity, you should consult with legal counsel and pursue it further in that direction. Our responsibility, of course, is towards the financial statements and the reporting of them. Think about withdrawing from the engagement. Now, if the fraud happened at a lower level again, it's something that an employee committed fraud, theft, even if it's substantial, we go to the upper level and we can say, hey, the upper level management didn't have well-designed internal controls or whatnot. This fraud took place, it shouldn't have taken place, but it's not lack, it's not the fact that the upper level of management were somehow involved or somehow manipulating or deceiving. If again, however, that the fraud is in the upper level of management, if we perceive that we're getting documentation that was altered in some way or there's some type of fraud involved in the representation of the financial statements, what we're engaged to give an opinion on, then we might say, hey, we're gonna remove ourselves from the engagement. And again, that's not something we wanna do because we waste a lot of time to do that because so we wanna be able to determine this at the front end, what type of clients do we wanna pick up? Do we wanna pick up clients? We wanna pick up good clients with integrity so we don't run into this problem. But if we do, if we go halfway through the audit and we say, I don't have any faith in the integrity of management at this point in time, and then at some point we'd have to consider just withdrawing from the engagement as well.