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

question 604

Multiple Choice

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

• A) An auditor is responsible for detecting employee errors and fraud, but not for discovering fraud involving employee collusion or management override.
• B) An auditor should plan the audit to detect errors and fraud that are caused by departures from GAAP.
• C) An auditor is not responsible for detecting errors and fraud unless the application of GAAS would result in such detection.
• 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:

Nonprogrammed Decisions

Choices enacted in reaction to scenarios that are distinct, ill-defined, highly unstructured, and carry significant implications for the organization.

Creative Problem Solving

An approach to problem-solving that involves out-of-the-box thinking and the generation of innovative solutions.

Ethical Problem

A situation that poses a moral dilemma, requiring an individual to choose between actions that are evaluated as right or wrong based on ethical principles.

Decision Rule

A decision rule is a guideline or criterion that guides choices or judgments in decision-making processes.