Distinguish between the terms errors and

fraud.

What is the$$ auditor's responsibility for finding$$ each?

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Part $1$

A$.$

An error is a misstatement on the financial statements the auditor creates unintentionally during the audit. Fraud is when the client intentionally creates misstatements on the financial statements. In accordance with acceptable accounting$$ standards, an auditor is not responsible for finding$$ errors; however, an auditor is responsible to find fraud if it is over$$ $$1$ million.$$

B$.$

An error is an immaterial misstatement on the financial statements that an auditor is not responsible for discovering in the normal course of an audit. Fraud is a material misstatement on the financial statements that an auditor is required to find under the applicable accounting standards.

C$.$

An error is an intentional misstatement of the financial statements. Fraud is an unintentional misstatement. Auditors are required to use professional skepticism in detecting misstatements due to$$ fraud; however, errors are not required to be detected unless the total amounts to more than$$ $$1$ million.

D$.$

An error is an unintentional misstatement of the financial statements. Fraud represents an intentional misstatement. The auditor is responsible for obtaining reasonable assurance that material misstatements in the financial statements are$$ detected, whether those misstatements are due to errors or fraud.