Which of the following statements best describes the auditor's responsibility regarding the detection of material errors and fraud?
a. The auditor is responsible for the failure to detect material errors and fraud only when such failure results from the non application of generally accepted accounting principles.
b. Auditing procedures may or may not need to be extended if the auditor's analysis indicates the existence of fraud risk factors.
c. The auditor is responsible for the failure to detect material errors and fraud only when the auditor fails to confirm receivables or observe inventories.
d. Extended auditing procedures are required to detect unrecorded transactions even if there is no evidence that material errors and fraud may exist.
Answer: B
CPA Exam
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