Which of the following statements reflects an auditor’s responsibility for detectingfraud?(1) An auditor is responsible for detecting employee errors and simple fraud, butnot for discovering fraudulent acts involving employee collusion or managementoverride.(2) An auditor should plan the audit to detect fraud caused by departures from GAAP.(3) An auditor is not responsible for detecting fraud unless the application of auditingstandards would result in such detection.(4) An auditor should design the audit to provide reasonable assurance of detectingerrors and fraud that are material to the financial statements.
Which of the following statements reflects an auditor’s responsibility for detectingfraud?(1) An auditor is responsible for detecting employee errors and simple fraud, butnot for discovering fraudulent acts involving employee collusion or managementoverride.(2) An auditor should plan the audit to detect fraud caused by departures from GAAP.(3) An auditor is not responsible for detecting fraud unless the application of auditingstandards would result in such detection.(4) An auditor should design the audit to provide reasonable assurance of detectingerrors and fraud that are material to the financial statements.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Which of the following statements reflects an auditor’s responsibility for detecting
fraud?
(1) An auditor is responsible for detecting employee errors and simple fraud, but
not for discovering fraudulent acts involving employee collusion or management
override.
(2) An auditor should plan the audit to detect fraud caused by departures from GAAP.
(3) An auditor is not responsible for detecting fraud unless the application of auditing
standards would result in such detection.
(4) An auditor should design the audit to provide reasonable assurance of detecting
errors and fraud that are material to the financial statements.
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