The auditor has a responsibility to respond to fraud risk by planning and performing the audit to obtain reasonable assurance that material misstatements, whether due to error or fraud, are detected. So the auditor should:

Question

Quizplus · Accepted Answer

The best choice is B because maintaining a level of professional scepticism is an important approach for an auditor in responding to fraud risk. This does not assume either honesty or dishonesty on the part of management. Option A assumes dishonesty while option C assumes that fraud is present on every audit, which is not necessarily the case. Option D assumes unquestioned honesty, which is not a reasonable approach in auditing.

The Auditor Has a Responsibility to Respond to Fraud Risk