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      Question

      According to SA 240, which of the following is TRUE

      regarding auditor’s responsibility in detecting fraud?
      A Auditor is responsible to prevent fraud Correct Answer Incorrect Answer
      B Auditor’s primary responsibility is to detect all frauds Correct Answer Incorrect Answer
      C Auditor should obtain reasonable assurance that FS are free from material misstatements due to fraud/error Correct Answer Incorrect Answer
      D Auditor must guarantee accuracy of accounts Correct Answer Incorrect Answer
      E Auditor must investigate every suspicion of fraud independently Correct Answer Incorrect Answer

      Solution

      Auditors are not responsible to prevent fraud; their role is to obtain reasonable assurance of true and fair financial statements.

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