Audits are expected to provide a higher degree of assurance for the detection of material irregularities, such as management fraud, than is provided for an equally material error.

Question

Quizplus · Accepted Answer

Audits are designed to provide reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error. The level of assurance for detecting material irregularities like fraud is not necessarily higher than for detecting material errors.

Audits Are Expected to Provide a Higher Degree of Assurance