[barelystayingsane]

Is management responsible for “preventing and detecting fraud” or for “internal controls that prevent and detect fraud”? I’ve gotten MCQs wrong on this, because there’s apparently a difference. However, the Becker text seems to use the phrases interchangeably. Can someone please tell me which one is correct? Thanks!

[Anonymous]

I believe management is responsible for implementing internal control (which prevents and detects fraud). Management would not be responsible for personally preventing and detecting the fraud, internal control is. That is my best guess, at least…

[Anonymous]

I believe management is responsible for implementing internal control (which prevents and detects fraud). Management would not be responsible for personally preventing and detecting the fraud, internal control is. That is my best guess, at least…

[Anonymous]

Tough question barely.

Management rep letter says “…internal control tp prevent and detect fraud.”

[Anonymous]

Tough question barely.

Management rep letter says “…internal control tp prevent and detect fraud.”

[barelystayingsane]

I was going to say internal controls, as well. On the flip side, the sample compilation and review engagement letters in Becker say management is responsible for “preventing and detecting fraud.” Maybe this is a SSARS vs. SAS difference, but I don't know what the purpose for the difference would be.

[barelystayingsane]

I was going to say internal controls, as well. On the flip side, the sample compilation and review engagement letters in Becker say management is responsible for “preventing and detecting fraud.” Maybe this is a SSARS vs. SAS difference, but I don't know what the purpose for the difference would be.

[tough_kitty]

“barely” – I see your multiple posts about AUD issues and every single one of them seems to ask about little details which I wouldn't even consider when studying for this exam….guess that explains the difference in our scores 😉

I haven't touch the AUD materials for several days now (changed jobs, so still readjusting) but from what I recall, the management is responsible for design, implementation, and maintenance (DIM) of internal control which is supposed to detect fraud…and they are liable for their own actions…but they are not responsible for the fraud committed by their employees….if I remember this correctly…..I am not using Becker so cannot relate to your specific examples.

FAR: 81 (May 2013)
BEC: 81 (July 2013)
REG: 83 (August 2013)
AUD: 82 (November 2013)
California CPA since 1/30/14

[tough_kitty]

“barely” – I see your multiple posts about AUD issues and every single one of them seems to ask about little details which I wouldn't even consider when studying for this exam….guess that explains the difference in our scores 😉

I haven't touch the AUD materials for several days now (changed jobs, so still readjusting) but from what I recall, the management is responsible for design, implementation, and maintenance (DIM) of internal control which is supposed to detect fraud…and they are liable for their own actions…but they are not responsible for the fraud committed by their employees….if I remember this correctly…..I am not using Becker so cannot relate to your specific examples.

FAR: 81 (May 2013)
BEC: 81 (July 2013)
REG: 83 (August 2013)
AUD: 82 (November 2013)
California CPA since 1/30/14

[barelystayingsane]

You're correct, tough_kitty…they're not liable for fraud committed by employees. I remember that from a practice question. That provides even more proof that DIM is probably the correct answer. I sent an email to Becker (I'm sure they hate me by now…I've been sending them at least one email a day lately), so I'll post here what they say!

[barelystayingsane]

You're correct, tough_kitty…they're not liable for fraud committed by employees. I remember that from a practice question. That provides even more proof that DIM is probably the correct answer. I sent an email to Becker (I'm sure they hate me by now…I've been sending them at least one email a day lately), so I'll post here what they say!

[tough_kitty]

Hey! Becker review costs like $3,000! Make them earn it! 😉

FAR: 81 (May 2013)
BEC: 81 (July 2013)
REG: 83 (August 2013)
AUD: 82 (November 2013)
California CPA since 1/30/14

[tough_kitty]

Hey! Becker review costs like $3,000! Make them earn it! 😉

FAR: 81 (May 2013)
BEC: 81 (July 2013)
REG: 83 (August 2013)
AUD: 82 (November 2013)
California CPA since 1/30/14

[barelystayingsane]

Got a response! As I guessed, it is a SAS vs. SSARS difference. I still find it unusual, but whatever… Perhaps it has something to do with the fact that internal control is not considered by the accountant during SSARS engagements, so they just say that management is directly responsible for preventing and detecting fraud.

[barelystayingsane]

Got a response! As I guessed, it is a SAS vs. SSARS difference. I still find it unusual, but whatever… Perhaps it has something to do with the fact that internal control is not considered by the accountant during SSARS engagements, so they just say that management is directly responsible for preventing and detecting fraud.

[Author]

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