Management of Tanvi Exports Ltd. refuses to allow the auditor to send a confirmation request to a major customer. Under SA 505, the auditor shall FIRST:

Correct answer: C) Inquire into management's reasons for the refusal and seek audit evidence about their validity and reasonableness

Explanation

SA 505 requires the auditor to inquire as to management's reasons, seek evidence as to their validity and reasonableness, evaluate the implications for risk assessment including fraud risk, and perform alternative procedures. If the refusal is unreasonable or alternative evidence cannot be obtained, the auditor communicates with those charged with governance and considers the effect on the opinion under SA 705.