Explain the responsibility of auditors for the detection of Fraud and Error.

Auditing and Assurance Revision Questions and Answers

Answer
Standards on Auditing/Auditing practices on Fraud and Error:
The responsibility for the prevention and detection of fraud and error rests with management through the implementation and continued operation of an adequate system of internal control. Such a system reduces but does not eliminate the possibility of fraud and error.
The objective of an audit of financial information is to enable an auditor to express an opinion on such financial information. In forming his opinion, the auditor carries out procedures designed to obtain evidence that will provide reasonable assurance that the financial information is properly stated in all material respects. Consequently, the auditor seeks reasonable assurance that fraud or error which may be material to the financial information has not occurred or that, if it has occurred, the effect of fraud is properly reflected in the financial information or the error is corrected. The auditor, therefore, should so plan his audit that he has a reasonable expectation of detecting material misstatements in the financial information resulting from fraud or error. The degree of assurance of detecting errors would normally be higher that of detecting fraud, since fraud is usually accompanied acts specifically designed to conceal its existence.



(Visited 7 times, 1 visits today)
Share this on:

Leave a Reply

Your email address will not be published.