All 18 Fraud & Error Responsibilities questions
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What are the two main types of fraud relevant to auditors? Whose responsibility is it to prevent and detect fraud? What are fraud risk factors and give examples? What is professional skepticism's role in detecting fraud? What is misappropriation of assets and what controls mitigate it? What is the fraud triangle? What is the auditor's responsibility for fraud under ISA 240? Why is revenue recognition presumed to be a fraud risk? What should the auditor do if fraud is suspected or identified during the audit? What is the difference between the auditor's and management's anti-fraud responsibilities?
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Auditing & Assurance › Fraud & Error Responsibilities

What is the difference between fraud and error in auditing?

Beginner

Answer

The distinguishing factor is intent. Error is an unintentional misstatement (a mistake in gathering/processing data, an incorrect estimate, or a misapplication of accounting). Fraud is an intentional act by one or more individuals involving deception to obtain an unjust or illegal advantage. Both can cause material misstatement; fraud is harder to detect because it's concealed.
Real-world example A miskeyed figure is an error; deliberately booking fictitious sales to hit targets is fraud.

Common follow-ups: What is the key distinguishing factor? | Why is fraud harder to detect?

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All 18 Fraud & Error Responsibilities questions