The difference between an error 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

An error is unintentional and can arise from a mistake in the accounting process or a misinterpretation of accounting principles. On the other hand, fraud is always an intentional act designed to deceive another party. Therefore, option B is the correct answer. The other options are incorrect as errors do not necessarily lead to a qualification of the auditors' opinion and fraudulent financial reporting may not always be material in amount.

The Difference Between an Error in the Financial Statements as Compared