When considering the risk of misstatement due to fraud,
A)the risk of not detecting a material misstatement due to fraud is lower than the risk of not detecting a misstatement due to error.
B)the risk is only made at the financial statement level.
C)auditing standards require the auditor to presume that risk of fraud exist in expense transactions.
D)auditing standards outline procedures the auditor should perform to obtain information from management about their consideration of fraud.

Question

Quizplus · Accepted Answer

Auditing standards require the auditor to perform procedures to obtain information from management about their consideration of fraud. This helps the auditor evaluate the risk of material misstatement due to fraud and design appropriate audit procedures. Options A, B, and C are incorrect as they do not reflect the appropriate view of the risk of fraud in financial reporting.

When Considering the Risk of Misstatement Due to Fraud