Does an audit guarantee that the financial statements are free from fraud?
I always hear that auditors should detect fraud, but the audit report does not say no fraud occurred. What is the right framing for AUD questions?
No. An audit provides reasonable assurance that the financial statements are free of material misstatement, whether caused by error or fraud. That is a high level of assurance, but not absolute assurance. Fraud may involve concealment, collusion, management override, or falsified evidence, so the auditor designs appropriate procedures without guaranteeing detection of every fraud.
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