1. Which of the following statements regarding fraud is correct?

1. The auditor may not detect all material frauds in the financial statements, but this won't necessarily mean the auditor has been negligent due to the nature of fraud and the likelihood of concealment.
2. The auditor must detect all material frauds in the financial statements.
3. The auditor must detect every fraud in the financial statements
4. The auditor is not responsible for detecting fraud as this is management's responsibility.