Why Is Fraud Detection an Important Part of the Audit

question 30

Multiple Choice

Why is fraud detection an important part of the audit?

• A)Auditors are required to seek out and find all fraud,regardless of its magnitude.
• B)Auditors expect that management will make them aware of any fraud in the financial statements.
• C)Society expects that financial statements have not been materially misstated due to fraud.
• D)Society realizes that some fraud was not intended to be discovered by auditors.

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Definitions:

Estate

The total of all the property, assets, and debts left by an individual at death.

Ownership Interest

The possession of rights, control, and benefits of ownership in property or a company by an individual or entity.

Land

An area of the earth's surface, including its resources and physical environment, which can be owned or used.

Life Estate

An ownership interest in which the holder has the right to possess the property until his or her death.