Which of the following statements best describes the auditor's responsibility regarding the detection of fraud?
A) The auditor is responsible for the failure to detect fraud only when such failure clearly results from nonperformance of audit procedures specifically described in the engagement letter.
B) The auditor is required to provide reasonable assurance that the financial statements are free of both material errors and fraud.
C) The auditor is responsible for detecting material financial statement fraud, but not a material misappropriation of assets.
D) The auditor is responsible for the failure to detect fraud only when an unqualified opinion is issued.

Question

Quizplus · Accepted Answer

The auditor is responsible for providing reasonable assurance that the financial statements are free from material misstatements due to fraud or error. This responsibility exists regardless of whether fraud is suspected or not. The responsibility of the auditor is not limited to detecting financial statement fraud, but also includes detecting material misappropriation of assets. The issuance of an unqualified opinion does not relieve the auditor of responsibility for detecting material misstatements due to fraud.

Which of the Following Statements Best Describes the Auditor's Responsibility