Detection of Fraud Is Integral to the Audit Function

question 64

Multiple Choice

Detection of fraud is integral to the audit function.The best reason for this is that:

• A)unless auditors can provide assurance that the financial statements are free of material misstatements due to fraud,there is no justification for the audit function.
• B)the AICPA has mandated that the auditor take on more responsibility than previously required because of management's demand for fraud finding.
• C)it is the responsibility of the auditor to provide internal control over a client organization sufficient to discover or prevent fraud from occurring.
• D)auditor fraud is a large concern of shareholders and the audit committee must continually monitor the auditors to ensure they are not misstating financial statements.

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Definitions:

Recommendations

Advised courses of action or suggestions made based on analysis and evaluation.

Claims

In the context of communication, claims are statements made by someone asserting a fact or belief, often requiring support or evidence.

Goodwill Closing

A positive and friendly closing remark in a letter or communication, intended to maintain good relationships.

Thank You In Advance

A phrase used to express gratitude to someone for assistance they are expected to provide in the future.