Accounting · Auditing and Assurance
Which statement most accurately reflects the auditor's responsibility regarding the detection of fraud according to ISA 240 (The Auditor's Responsibilities Relating to Fraud)?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The auditor's responsibility is to obtain reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error, while maintaining professional scepticism.✓
- 2The auditor is not responsible for detecting fraud unless a material misstatement arises, in which case a qualified opinion should be issued.
- 3The auditor is primarily concerned with fraud involving senior management, as these often result in material misstatements.
- 4The primary responsibility of the auditor is the prevention and detection of fraud and error, by obtaining absolute assurance.
Correct answer
The auditor's responsibility is to obtain reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error, while maintaining professional scepticism.
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