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SA 240 places primary responsibility for preventing and detecting fraud on:
AManagement and TCWG
BThe auditor
CSEBI
DThe shareholders
Answer & Solution
Correct answer: B. The auditor
1. SA 240.4 explicitly places primary responsibility on management and TCWG.
2. Auditor obtains reasonable assurance about freedom from material misstatement, whether due to fraud or error.
3. Auditor is not a fraud investigator.
_Source: ICAI BoS CA Final Paper 3, Ch 6 "Standards on Auditing and Professional Ethics"_
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