Which of the following statements BEST describes the auditor's responsibility regarding the detection of fraud?
A) The auditor has greater responsibility for detecting material errors than fraud and direct- effect illegal acts.
B) The auditor has equal responsibility for detecting errors, fraud and direct- effect illegal acts.
C) The auditor has greater responsibility for detecting material errors than fraud.
D) The auditor has equal responsibility for detecting errors, fraud and indirect- effect illegal acts.

Question

Quizplus · Accepted Answer

The auditor has equal responsibility for detecting errors, fraud, and direct-effect illegal acts. This is because the auditor must plan and perform the audit to obtain reasonable assurance of detecting material misstatements due to fraud or error. The auditor is also required to evaluate whether the financial statements are free from material misstatement, whether caused by fraud or error. Therefore, the auditor must exercise professional skepticism and maintain a questioning mind throughout the audit, specifically looking for indications of fraud. However, it should be noted that the auditor is not responsible for detecting all instances of fraud, as some fraud may not be detectable through normal audit procedures.

Which of the Following Statements BEST Describes the Auditor's Responsibility