The primary factor that distinguishes error from fraud is:
A)whether the underlying cause of misstatement relates to the misapplication of accounting principles or to clerical processing.
B)whether the misstatement is perpetrated by an employee or by a member of management.
C)whether the underlying cause of a misstatement is intentional or unintentional.
D)whether the misstatement is concealed.

Question

Quizplus · Accepted Answer

The primary factor that distinguishes error from fraud is whether the underlying cause of a misstatement is intentional or unintentional. Errors are unintentional and result from mistakes or omissions in the accounting process, while fraud is intentional and involves a deliberate act to misstate the financial statements. The other options are not accurate as they do not differentiate errors from fraud.

The Primary Factor That Distinguishes Error from Fraud Is