ACCA AA · Chapter 7 · Question 1 of 8
Under ISA 240, who has primary responsibility for the prevention and detection of fraud?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Management and those charged with governance
Explanation
ISA 240 states that primary responsibility for preventing and detecting fraud rests with those charged with governance and management, mainly through internal controls. The external auditor is responsible for obtaining reasonable assurance that the financial statements as a whole are free from material misstatement, whether due to fraud or error.
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