Which of the following statements is accurate?
A) External auditors are usually specifically trained to detect fraud.
B) Audits of books and records rarely discover frauds.
C) Less than 5 percent of all frauds are detected by auditors.
D) The presence of auditors provides a major deterrent effect.

Question

Quizplus · Accepted Answer

The presence of auditors provides a major deterrent effect. This is because the knowledge that auditors will be reviewing the books and records can discourage employees from attempting to commit fraud. While external auditors may not be specifically trained to detect fraud, their oversight and review of financial information can still provide a strong deterrent effect. Additionally, audits do occasionally detect fraud, so statement B is not accurate. Statement C is grossly inaccurate as studies have found that auditors detect a significant portion of frauds.

Which of the Following Statements Is Accurate