Which of the following statements best describes auditors' responsibility to detect errors and frauds?
A) Auditors should design an audit to provide reasonable assurance of detecting errors and frauds that are material to the financial statements.
B) Auditors are responsible to detect material errors but have no responsibility to detect material frauds that are concealed through employee collusion or management override of the internal control structure.
C) Auditors have no responsibility to detect errors and frauds unless analytical procedures or tests of transactions identify conditions causing a reasonably prudent auditor to suspect that the financial statements were materially misstated.
D) Auditors have no responsibility to detect errors and frauds because auditors are not insurers and an audit does not constitute a guarantee.

Question

Quizplus · Accepted Answer

Auditors are responsible for designing an audit to provide reasonable assurance of detecting errors and frauds that are material to the financial statements. This means that auditors should have an understanding of the client's internal controls and perform procedures to detect material misstatements in the financial statements. While auditors cannot guarantee that all errors and frauds will be detected, they should exercise professional skepticism and maintain an attitude of professional skepticism throughout the audit process. Additionally, auditors are required to report any frauds they do detect to management and, if necessary, to the appropriate authorities.

Which of the Following Statements Best Describes Auditors' Responsibility to Detect