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I did the Opentution BT mock exam and I got a question asking whether the statement ‘the responsibility of the auditors is to detect fraud’ is true or false.
I think that the statement is true based on what I’ve read in my book. But the mock answer is saying that it’s false. Can you help me with this question please!
It is NOT the responsibility of auditors to detect fraud. Frauds can be committed by clever people using devices such as forged documents and auditors cannot be expected to find sophisticated frauds.
Having said that, if something unusual comes to the attention of the auditor then this should be investigated. It might have an innocent explanation, or it might be an error or it might be fraud.
Large frauds could be expected to distort the financial statements and these should be detected as a matter of course because the FS would not be showing a true ans fair view.
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