low after performing the specific risk assessment procedures as required by auditing standards.

& Co has assessed the risk of material misstatement due to fraud at the financial statement level as

ended $31$ December $2019$ is currently in progress. Before the discovery of Tiffany$$s activities, April

& Co have been the auditor of Rose Limited for the last two years and the audit for the year

Required:

a$)$ In theory, define fraud and explain the TWO

auditor$$s consideration of fraud. And suggest TWO examples for EACH type of

types of misstatements that are relevant to

April

were issued to these ten fictitious employees from October to December $2019.$

has created ten fictitious employees in the company$$s factory payroll. A number of pay cheques

number of production and management contracts with the government at cost$-$plus basis. Tiffany

Tiffany is the Human Resources Manager of Rose Limited in Hong Kong. Rose Limited has a