Several months prior to beginning an audit engagement of the Taunton Manufacturing Company, you point out to Taunton's CFO, Marsha Wade, that as part of your responsibilities, you will design the audit to provide reasonable assurance of detecting any material errors or fraud that may exist. Wade, somewhat alarmed by your statement, responds that all of her employees are trustworthy and, therefore, refuses to pay any portion of the audit fee relating to a search for fraud. Further, she states her understanding that auditors are not responsible for detecting fraud, assuming generally accepted auditing standards are followed.

Required: 

Respond to each of the controller's statements.