The Case Titled "Expectations for Professional Judgment by Auditors to Detect

question 28

Multiple Choice

The case titled "Expectations for Professional Judgment by Auditors to Detect Fraud" suggests that:

• A)Fraud is a common element of audits.
• B)Auditors always detect fraud if they follow professional standards.
• C)Even an audit in accordance with professional standards can fail to detect a material fraud in the financial statements, particularly where management has gone to great lengths to cover up the fraud.
• D)Auditors should not be expected to uncover fraud since management always has the upper hand with respect to financial statement matters.

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Definitions:

Economic Difference

The disparity in economic conditions, wealth, or resources between different groups or regions.

Compounded Monthly

The process where interest earned is added to the principal sum each month, which then earns further interest.

Inheritance

Assets or property received from someone who has passed away, often as dictated by a will or the laws of intestacy.

Investment

Assigning funds with the goal of achieving returns or making a profit.