Auditors should consider risk factors related to incentives, opportunities, and attitudes whenever they assess the likelihood of material misstatements due to fraud.

Question

Quizplus · Accepted Answer

This statement is correct as it aligns with the principles of the fraud triangle, which suggests that fraud occurs when an individual is motivated by incentives or pressures, has the opportunity to commit fraud, and has an attitude that justifies fraudulent actions. Therefore, auditors must consider these risk factors when assessing the likelihood of material misstatements due to fraud.

Auditors Should Consider Risk Factors Related to Incentives, Opportunities, and Attitudes