What is the greatest benefit that can be derived by discussing fraud factors with management of the client organization under audit?
A)Greater credibility with the client organization and its management.
B)The impression on the client that potential fraud is not being considered by an independent source.
C)Further consideration of the risks,and discussion of how management can reduce the risks.
D)Full disclosure of all fraud occurring during the year under audit in the company.

Question

Quizplus · Accepted Answer

By discussing fraud factors with management of the client organization under audit, auditors can inform them about the potential risks and how to minimize them. This can lead to a proactive approach by management to prevent fraud and increase the overall effectiveness of their internal control system.

Answer: A
 In addition to minimizing potential fraud risks, discussing fraud factors with management can also improve the credibility of the auditing firm and the auditors with the client organization. This can lead to a more open and trusting relationship between the two parties.

Answer: D
 Full disclosure of all fraud occurring during the year under audit in the company is not a benefit that can be derived by discussing fraud factors with management. It is the responsibility of the auditor to report any fraud that they uncover during the course of the audit, regardless of whether they discussed fraud factors with management.

What Is the Greatest Benefit That Can Be Derived by Discussing