Which of the following situations would be defined as fraud under the auditing standards?
A)Errors in the application of accounting principles.
B)Errors in the accounting data underlying the financial report.
C)Misinterpretation of facts that existed when the financial report was prepared.
D)Misappropriation of assets.

Question

Quizplus · Accepted Answer

Misappropriation of assets is a type of fraud as it involves stealing or misuse of company assets. Errors in accounting principles, accounting data, or misinterpretation of facts may be considered as mistakes or misjudgments, but not necessarily fraud unless they are intentional and done with the intent to deceive.

Which of the Following Situations Would Be Defined as Fraud