Which one of the following statements is true? Misstatements found in the previous year's audit:
A) that occur again in the current year's audit indicate management fraud.
B) have little likelihood of occurring again in the current year's audit.
C) have a high likelihood of occurring again in the current year's audit.
D) that occur again in the current year's audit indicate employee fraud.

Question

Quizplus · Accepted Answer

Misstatements found in the previous year's audit have a high likelihood of occurring again in the current year's audit, as there may be underlying issues within the organization's systems, controls, or processes that have not been addressed by management. This does not necessarily indicate the presence of fraud, however.

Which One of the Following Statements Is True? Misstatements Found