Under Statements on Auditing Standards,which of the following would be classified as an error?
A) Misappropriation of assets for the benefit of management.
B) Misinterpretation by management of facts that existed when the financial statements were prepared.
C) Preparation of records by employees to cover a fraudulent scheme.
D) Intentional omission of the recording of a transaction to benefit a third party.

Question

Quizplus · Accepted Answer

An error is an unintentional misstatement or omission in the financial statements, such as a misinterpretation of facts by management. The other options involve intentional acts, which are classified as fraud.

Under Statements on Auditing Standards,which of the Following Would Be