Audits of Financial Statements Are Valuable to the Detection of Fraud

question 2

Multiple Choice

Audits of financial statements are valuable to the detection of fraud because:

• A)Auditors are not required to seek out and find all fraud.
• B)Auditors expect that management will make them aware of any fraud in the financial statements.
• C)Society expects that the auditor will ensure that financial statements have not been materially misstated due to fraud.
• D)Society realizes that some fraud is not capable of being discovered by auditors.

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Definitions:

Member Countries

Refers to nations that are part of an international organization or agreement and have agreed to adhere to its rules and policies.

Free Flow

A state or situation where movement or progress occurs without obstruction or resistance, often used in the context of ideas, traffic, or materials.

Products

Items or services offered for sale by a business to satisfy the needs or wants of consumers.

Services

Intangible activities or benefits that are provided or sold as the primary product, such as healthcare, education, maintenance, or entertainment, distinguishable from physical goods.