Which of the Following Statements Reflects an Auditor's Responsibility for Detecting

question 70

Multiple Choice

Which of the following statements reflects an auditor's responsibility for detecting fraud?

• A)An auditor is not responsible for discovering fraudulent acts involving employee collusion.
• B)The audit should be planned to detect fraud caused by departures from GAAP.
• C)An auditor is only responsible for detecting fraudulent financial reporting.
• D)An auditor should design the audit to provide reasonable assurance of detecting errors and fraud that are material to the financial statements.

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Definitions:

Nondirectional Test

A hypothesis that does not predict the direction of the difference or association between variables, only that there is a difference.

One-Tailed Test

A statistical test that determines the probability of the observed data under the assumption that one end of the probability distribution is scrutinized.

Two-Tailed Test

A statistical hypothesis test in which the critical area of a distribution is two-sided and tests whether a sample is either greater than or less than a certain range of values.

Null Hypothesis

A statement suggesting that no statistical significance exists in a set of observations.