MockQuestions

Senior Auditor Interview

25 Questions and Answers by

Brian Schuchart is a CPA and Senior Finance Business Partner. His professional experience includes senior management roles with NBC Sports, Virtual Health, and the Children's Hospital of Philadephia.

Senior Auditor was published on January 4th, 2021. Learn more here.

Question 1 of 25

In an audit, who is primarily responsible for the prevention and detection of fraud?

Next Question  

Senior Auditor Interview

  1. 1.

    In an audit, who is primarily responsible for the prevention and detection of fraud?

      How to Answer

      According to auditing pronouncement AU-C Section 240, a company's management is primarily responsible for detecting fraud and preventing it in the first place by having effective internal controls. An auditor must conduct an audit in accordance with GAAS (generally accepted auditing standards). However, given the limitations of an audit, there is an inherent risk that not all material misstatements will be detected.

      Brian's Answer

      "Ultimately, it is a company's management that is responsible for preventing and detecting fraud within their organization. They can achieve this by implementing effective internal controls and committing to a culture of honesty and ethical behavior. As auditors, there is a chance we would catch fraud and misstatements during our audit. However, there is an inherent risk that an audit won't catch all material misstatements and fraud."

      1 Community Answer

      Anonymous Answer

      "It is the management's responsibility to prevent and detect fraud. The auditor's responsibility is only confined to assessing the risks of material misstatement based on his professional skepticism and judgment. He can rely upon the management's representation as long as the auditor himself exercises due care. As it is said in our auditing language, "Auditor is a watchdog and not a bloodhound"."

      Cindy's Answer

      Great answer. This answer showcases your knowledge. Great job!

      Was this answer helpful? Yes (0) or No (0)