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If an external auditor in the process of considering the company’s financial statement came
across an incident of fraud that took place in the year, he/she must:A qualify the accounts regardless of the size of the fraud
B report to the shareholders by way of a note to the accounts, regardless of the size of
the fraud
C qualify the accounts only if the fraud is material and not properly recorded in the
accounts
D report to the shareholders by way of a note to the accounts, but only if the fraud is
materialans: C
but I don’t understand why the answer is, C not ,B
The main job of external auditor is to detect fraud and report them to shareholders.
Zlad@123 is incorrect. It is absolutely not the job of auditors to detect fraud. It is the job of auditors to report on the financial statements as to whether or not they show a true and fair view. Material frauds should be detected as part of the audit as they are incompatible with a T&F set of financial statements.
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