The difference between errors in the financial statements as compared to fraud is:
A) An error is always an intentional act designed to deceive another party
B) Fraud is always an intentional act designed to deceive another party
C) An error always leads to a qualification of the auditors' opinion
D) Fraudulent financial reporting is always material in amount

Question

Quizplus · Accepted Answer

Errors are unintentional mistakes in the financial statements, while fraud involves intentional acts to deceive another party. Therefore, option B is the correct choice. Option A is incorrect because errors are not always intentional. Option C is incorrect because not all errors lead to a qualification of the auditors' opinion - it depends on the magnitude and materiality of the error. Option D is incorrect because fraudulent financial reporting may not always be material in amount.

The Difference Between Errors in the Financial Statements as Compared