Which of the Following Statements Best Describes Auditors' Responsibility to Detect

question 89

Multiple Choice

Which of the following statements best describes auditors' responsibility to detect errors and frauds?

• A) Auditors should design an audit to provide reasonable assurance of detecting errors and frauds that are material to the financial statements.
• B) Auditors are responsible to detect material errors but have no responsibility to detect material frauds that are concealed through employee collusion or management override of the internal control structure.
• C) Auditors have no responsibility to detect errors and frauds unless analytical procedures or tests of transactions identify conditions causing a reasonably prudent auditor to suspect that the financial statements were materially misstated.
• D) Auditors have no responsibility to detect errors and frauds because auditors are not insurers and an audit does not constitute a guarantee.

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Definitions:

Expected Expense

Anticipated costs associated with planned activities or purchases within a certain period.

Expected Income

The amount of money one anticipates earning over a specific period, often considering current income and potential changes.

Expected Income

The amount of money one anticipates receiving over a specific period, considering various factors like job security and market conditions.

Expected Value

is a statistical measure that calculates the average outcome of a random variable over a large number of trials.