CFE – Fraud Prevention and Deterrence — Question 14

International Standard on Auditing (ISA) 240 establishes auditors as being primarily responsible for the prevention and detection of fraud within an organization.

Answer options

• A. True
• B. False

Correct answer: B

Explanation

The correct answer is B because ISA 240 emphasizes that while auditors play a role in fraud detection, the primary responsibility for preventing and detecting fraud lies with management and those charged with governance. Therefore, stating that auditors are primarily responsible is inaccurate.