As a result of its significant concern with financial statement fraud, the accounting profession responded in 2002 with:
A) SAS No. 1 - Consideration of Fraud in a Financial Statement Audit.
B) SAS No. 99 - Consideration of Fraud in a Financial Statement Audit.
C) the creation of the Public Company Accounting Oversight Board PCAOB.
D) guidance to overcome the "expectation gap" held by the public.

Question

Quizplus · Accepted Answer

SAS No. 99 - Consideration of Fraud in a Financial Statement Audit is the most relevant response from the accounting profession to financial statement fraud. It provides guidance to auditors on how to detect and respond to fraud risks during an audit, emphasizing the importance of professional skepticism and a risk-based approach to audit planning and execution. While SAS No. 1 was an earlier standard that addressed fraud, it was replaced by SAS No. 99 in 2002, which reflects a more comprehensive and updated approach to detecting and responding to fraud. The creation of the PCAOB and guidance on the "expectation gap" are also relevant responses to concerns with financial statement fraud, but they are not direct responses from the accounting profession itself.

As a Result of Its Significant Concern with Financial Statement