In which of the following situations would failure to detect a fraud constitute grounds for a claim of negligence?

(a) The fraud was perpetrated by a senior management override of internal controls which had been relied upon in reducing the extent of detailed testing.

(b) The auditors reported discrepancies to local management but did not investigate further as the likely impact on the accounts was not material.

(c) The auditors accepted local management representations as to discrepancies as the potential impact of the fraud was not material to the accounts as a whole.

(d) The auditors relied on sample evidence and thus failed to detect the fraudulent transactions.

Choose the best answer.