Even though an audit is well planned and properly executed, a material misstatem

Question

Even though an audit is well planned and properly executed, a material misstatement due to fraud may not be detected. This may be due to: I. Fraud may involve collusion or false documentation making it more difficult to detect. Il. Auditing employs the use of sampling and a sample without evidence of fraud may not be representative of the population II. The evaluation of fraud risk factors requires the application of judgment and is not precise. O I and IIl only O I, II, and IlI O Il and I only O I and Il only

Explanation / Answer

Answer: Option B- I , II, and III.

Because when we audit, though it is well planned and properly executed, a material misstatement due to fraud may not be detected since they are crept in due to carefully organised schemes.

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