Accounting · Auditing and Internal Control
Which of the following statements about the responsibilities of external and internal auditors regarding fraud is NOT correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The work of internal auditors in reviewing internal controls helps management to fulfil its responsibility for preventing fraud.
- 2It is not the primary responsibility of the external auditors to detect fraud within a client entity.
- 3The internal auditor must always consider the potential of management overriding controls and modify procedures accordingly for all engagements.✓
- 4The external auditor must maintain professional scepticism throughout the audit, recognizing that fraud could exist.
Correct answer
The internal auditor must always consider the potential of management overriding controls and modify procedures accordingly for all engagements.
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