Which of the following statements best describes the auditor's responsibility regarding the detection of fraud?
A)The auditor must extend auditing procedures to actively search for fraud.
B)The auditor is responsible for the failure to detect fraud only when an unmodified auditor's opinion is issued.
C)The auditor is responsible for fraud when such failure results from non-performance of procedures described in the engagement letter.
D)The auditor must plan the audit so as to have a reasonable expectation of discovering material fraud.

Question

Quizplus · Accepted Answer

The auditor has a responsibility to plan the audit in a way that provides reasonable assurance of detecting material misstatements due to fraud. This means that the auditor must consider the possibility of fraud and design procedures to mitigate those risks. However, it is important to note that the auditor's responsibility is not to actively search for fraud, as this is not always possible or practical. Additionally, the auditor can still be found responsible for failing to detect fraud even if they issue a modified opinion or if the engagement letter does not specifically address fraud.

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