An independent auditor has the responsibility to design the audit to providereasonable assurance of detecting errors and fraud that might have a material effecton the financial statements. Which of the following, if material, is a fraud as definedin auditing standards?(1) Misappropriation of an asset or groups of assets.(2) Clerical mistakes in the accounting data underlying the financial statements.(3) Mistakes in the application of accounting principles.(4) Misinterpretation of facts that existed when the financial statements were prepared.
An independent auditor has the responsibility to design the audit to providereasonable assurance of detecting errors and fraud that might have a material effecton the financial statements. Which of the following, if material, is a fraud as definedin auditing standards?(1) Misappropriation of an asset or groups of assets.(2) Clerical mistakes in the accounting data underlying the financial statements.(3) Mistakes in the application of accounting principles.(4) Misinterpretation of facts that existed when the financial statements were prepared.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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An independent auditor has the responsibility to design the audit to provide
reasonable assurance of detecting errors and fraud that might have a material effect
on the financial statements. Which of the following, if material, is a fraud as defined
in auditing standards?
(1) Misappropriation of an asset or groups of assets.
(2) Clerical mistakes in the accounting data underlying the financial statements.
(3) Mistakes in the application of accounting principles.
(4) Misinterpretation of facts that existed when the financial statements were prepared.
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