. Discuss the auditor’s responsibility for detecting fraud, including fraudulent financial reporting and misappropriation of assets....

. Discuss the auditor’s responsibility for detecting fraud, including fraudulent financial reporting and misappropriation of assets. Is there any sign that should alert the auditor to potential fraud?

Expert Solution

The primary responsibility of auditor is he has to ensure that the financial statement reflect true and fair view as per the applicable financial reporting framework. The secondary responsibility is to detect fraud and errors and to find if there is any misrepresentation in the financial statements. He has to physically verify whether the asset accounted in the books of accounts physically exist? Whether assets are recorded as per applicable accouting standards? Whether there is any improper disclosure. Whether there is any fictious assets used to cover up the fraud. Before the start of the audit process the auditor must have a broad idea of the clients's business and itsi environment in order to identify the potencial areas where there are high chances of frauds to take place. Last but not the least the auditor should ensure to give his opinion stating that the opinion is given based on the documents provided to him and that he has done his best to deduct fraud which do not have any complex concealments.

ekkarill92 answered 1 year ago

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