62.Fraud
Fraud has a corrosive effect on the trust necessary for companies to do business. Management is
responsible for running the company and preventing and detecting fraud. Preventing and detecting fraud
is difficult because fraud is intentionally hidden and may involve collusion by multiple participants.
Even though audits are properly performed in accordance with relevant GAAS, they may not detect
material fraud. However, auditors are responsible for obtaining reasonable assurance that the financial
statements are not materially misstated as a result of fraud.