Category Archive for: The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements

QUESTIONS AND ANSWERS

The general manager of your client company has set up his own firm as supplier of goods. Fictitious invoices were sent to the company and the firm was paid without supplying goods to the company. The general manager’s duties included matching of invoices with goods received notes. Upon his initials on the invoice indicating that a matching has been…

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INTRODUCTION

Fraud involves both, the deception to obtain unjust advantage and also intentional misrepresentations in the financial statements. Error is unintentional mistake in the financial statements. However, if material error is not corrected it is considered as an intentional misstatement. RESPONSIBILITY FOR PREVENTION Responsibility of management include: Safeguarding of assets. Preparation of reliable financial statements giving a true and…

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