Why is fraud detection an important part of the audit?
A)Auditors are required to seek out and find all fraud,regardless of its magnitude.
B)Auditors expect that management will make them aware of any fraud in the financial statements.
C)Society expects that financial statements have not been materially misstated due to fraud.
D)Society realizes that some fraud was not intended to be discovered by auditors.

Question

Quizplus · Accepted Answer

Fraud detection is important in an audit because society expects that financial statements are free from material misstatement due to fraud. It is the responsibility of auditors to detect fraud or risk of fraud, as it can have a significant impact on the financial statements and the decision-making of stakeholders. While auditors are not expected to find all fraud, their procedures should be designed to provide reasonable assurance that material fraud is detected.

Why Is Fraud Detection an Important Part of the Audit