Why is it important to distinguish the auditor's assessment of the risk of material misstatement due to fraud from the assessment of the risk of material misstatement due to error?

Auditing standards

require the auditor to

suggest that the auditor

explicitly consider fraud risk because the risk of not detecting a material misstatement due to fraud is

higher

lower

than the risk of not detecting a misstatement due to error. Fraud often

does not involve

involves

complex and sophisticated schemes designed by perpetrators to conceal it. And, individuals engaged in conducting a fraud

are often honest about the information they provide

often intentionally misrepresent information

, and they

may

will not

try to conceal the transaction through collusion with others. As a result, explicitly focusing on the risks of material misstatements due to fraud

does not help

helps

the auditor apply professional skepticism as part of the auditor's planning procedures.