The purpose of this assignment is to understand audit risk and the auditor's responsibility for detecting fraud.

Read the following scenarios, then answer the questions that follow. Submit your responses in a Microsoft Word document.

1. Explain the difference between errors and fraud. Give an example of each.

2. What is management's responsibility regarding fraud?

3. What are the auditor responsibilities regarding fraud according to either the PCAOB or Sarbanes-Oxley Act?

4. Explain audit risk in your own words. Explain how control risk, detection risk, and inherent risk are interrelated.

5. What are the three factors that are generally present when fraud occurs? What is the required documentation for these risk factors?