Auditors are better positioned than anyone to detect which element of fraud:
A) Theft
B) Conversion
C) Concealment
D) None of the above

Question

Quizplus · Accepted Answer

A: incorrect because auditors are rarely present when the theft takes place. They spend a few weeks conducting periodic audits, and the thefts often stop during this period. The co-workers, managers, and other employees are the ones who usually detect fraud during the theft.
B: incorrect because auditors aren't around enough to recognize the conversion of the fraud. Managers, co-workers, and friends are the only ones in a position to notice the changes that come about when the conversion of stolen assets begins.
C: incorrect because although auditors are in a good position to detect fraud, company accountants and co-workers are still in a better position to detect fraud through concealment. Auditors are frequently key in detecting fraud through its concealment. If audit samples include altered documents, miscounts, or other concealment efforts, auditors may suspect fraud. However, because co-workers and company accountants are more aware of the circumstances in a company, they can more easily detect the fraud.
D: correct.

Auditors Are Better Positioned Than Anyone to Detect Which Element