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Errors vs. Fraud in Property, Plant, and Equipment
Read the overview below and complete the activities that follow.
Misstatements can be of two types. The first type, an error, is deemed to be unintentional. The second type, fraud, is deemed to be an intentional act.
CONCEPT REVIEW:
Auditors have the responsibility to plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Misstatement is classified as either unintentional (error) or intentional (fraud). There are specific examples of these within the audits of property, plant, and equipment.
Read the potential misstatements for Property, Plant, and Equipment and indicate whether each is an error or fraud by selecting it under the appropriate heading.