Auditors need to be attuned to the red flags that fraud may exist because:
A) Materiality judgments are based on red flags identifying possible material misstatements
B) Audit opinions must be withdrawn when red flags indicate fraud may exist
C) Overly-aggressive accounting and outright manipulation of earnings may exist
D) All of the above

Question

Quizplus · Accepted Answer

Red flags indicating fraud may exist, such as overly-aggressive accounting and outright manipulation of earnings, are critical for auditors to identify to ensure the financial statements they are auditing are free from material misstatement due to fraud.

Auditors Need to Be Attuned to the Red Flags That