The auditor's responsibility for uncovering direct-effect illegal acts is the same as for fraud.

Question

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The auditor's responsibility for detecting direct-effect illegal acts is the same as for fraud, as both involve the possibility of material misstatements in the financial statements. The auditor's responsibility for detecting illegal acts that have an indirect effect on the financial statements is lower, as these may not be material to the financial statements and may not require disclosure.

The Auditor's Responsibility for Uncovering Direct-Effect Illegal Acts Is the Same