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The audit client's board of directors and audit committee refused to take any action with respect to an immaterial illegal act which was brought to their attention by the auditor. Because of their failure to act, the auditor withdrew from the engagement. The auditor's decision to withdraw was primarily due to doubts concerning :

A. Adequate financial statement disclosures.

B. Compliance with the statutory laws and regulations.

C. Scope limitations resulting from their inaction.

D. The integrity of management.

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