What is the difference between fraud and error?
This is a technical topic covered in the auditing standards under AU-C Section 240. The key difference between fraud and error is that the former is intentional and the latter is unintentional. There are two main types of fraud that an internal auditor should be concerned with: fraudulent reporting and misappropriation of assets (ie theft).
"The main difference between fraud and error is that fraud is intentional and errors are unintentional. As internal auditors, we are primarily concerned with financial misstatements that are caused by fraudulent financial reporting and misstatements that are caused by theft and other misappropriation of assets."
Community answers are written by other candidates practicing this set. Reading how others frame the same question is one of the fastest ways to sharpen your own.
Anonymous Answer
Fraud is intentional and Error is unintentional. While both are areas of weakness. An internal auditor's role is to focus on areas of fraudulence and the behaviors associated with them. Errors can be mitigated by pointing the errors out and processing why those things can happen.
Marcie's Feedback
Excellent! You clearly have a solid understanding of the difference between fraud and error. The interviewer will appreciate that you're knowledgeable about this and know how to handle both situations.
