The following statements relate to the
auditor's responsibility for the detection of
errors and fraud. Which of the statement is
correct?
I. Due to the inherent limitations of the
audit, there is a possibility that material
misstatements in the financial
statements may not be detected.
II. The subsequent discovery of material
misstatement of the financial information
resulting from fraud or error does not, in
itself, indicate that the auditor failed to
follow the basic principles and essential
procedures of an audit.
a. I only
b. II only
c. Both statements are true
d. Both statements are false
auditor's responsibility for the detection of
errors and fraud. Which of the statement is
correct?
I. Due to the inherent limitations of the
audit, there is a possibility that material
misstatements in the financial
statements may not be detected.
II. The subsequent discovery of material
misstatement of the financial information
resulting from fraud or error does not, in
itself, indicate that the auditor failed to
follow the basic principles and essential
procedures of an audit.
a. I only
b. II only
c. Both statements are true
d. Both statements are false