Which of the following best defines fraud in a financial statement auditing context?
A) Fraud is an unintentional misstatement of the financial statements.
B) Fraud is an intentional misstatement of the financial statements.
C) Fraud is either an intentional or unintentional misstatement of the financial statements, depending on materiality.
D) Fraud is either an intentional or unintentional misstatement of the financial statements, depending on consistency.

Question

Quizplus · Accepted Answer

In a financial statement auditing context, fraud is defined as an intentional misstatement of the financial statements. This includes intentional omissions or misrepresentations of financial information that could affect a user's decision-making process. Intentional in this context means that the misstatement was made with knowledge of its falsity or with reckless disregard for the truth. This definition differs from errors or unintentional misstatements, which may also be present in financial statements but are not considered fraudulent.

Which of the Following Best Defines Fraud in a Financial