The$$ auditor's responsibility includes working closely with management by going through every material transaction is in compliance with the applicable laws and regulations. For$$ example, the auditor should obtain a list of material transactions the company performed over the year and perform a random sampling of the list to ensure there have not been a violation to the laws and regulations. If an item is not material in$$ nature, the auditor must only discuss with management the process to journalize the entry.

B$.$

The auditor should obtain sufficient appropriate evidence regarding material amounts and disclosures that are directly affected by laws and regulations. For$$ example, the auditor should perform tests to identify if there have been any material violations of federal or state tax laws.$$ However, the auditor should inquire of management and inspect correspondence with relevant licensing and regulatory agencies to identify noncompliance that may have a material effect on the financial statements.

C$.$

The auditor should obtain documentation on the laws and regulations of any material transaction that in in question of compliance of the laws. For$$ example, the auditor should look at material transactions of inventory purchases and ensure proper accounting laws and regulations are being adhered to$.$ However, the auditor should obtain paystubs and federal or state tax returns to ensure adherence to withholding laws and regulations that over time become material in nature.

D$.$

The auditor is responsible for obtaining documentation on every law and regulation that the accounting department utilizes in their natural course of business. For$$ example, the auditor should obtain documentation on individual$$ transactions, like asset purchases or building sales.$$ However, the auditor should only obtain documentation on a group of transactions regarding cost of goods sold purchases.