Which of the following statements reflects an auditor's responsibility for detecting fraud?
A)An auditor is not responsible for discovering fraudulent acts involving employee collusion.
B)The audit should be planned to detect fraud caused by departures from GAAP.
C)An auditor is only responsible for detecting fraudulent financial reporting.
D)An auditor should design the audit to provide reasonable assurance of detecting errors and fraud that are material to the financial statements.

Question

Quizplus · Accepted Answer

Auditors have a responsibility to design an audit that provides reasonable assurance of detecting errors and fraud that are material to the financial statements. This includes both fraudulent financial reporting and misappropriation of assets (i.e. theft). Detection of fraud involving employee collusion is also a part of the auditor's responsibility. Additionally, the audit should be planned to detect fraud, whether it is caused by departures from GAAP or other means.

Which of the Following Statements Reflects an Auditor's Responsibility for Detecting