What is a primary responsibility of auditors in relation to fraud?

Auditors have a critical role in enhancing the reliability of financial information, and a primary responsibility is to obtain reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This principle reflects the fact that, while auditors are tasked with the detection of fraud, they are not expected to detect every instance of it. Their work involves assessing the risk of material misstatement due to fraud and designing audit procedures accordingly.

Obtaining reasonable assurance means that the audit is conducted with due diligence and professional skepticism, allowing the auditor to express a view on the financial statements as a whole. This entails evaluating internal controls and understanding the entity's environment to identify areas where fraud risk is heightened.

While confirming the accuracy of financial statements, preparing internal control systems, and detecting all instances of fraud are indeed important activities within the broader context of an organization, they do not encapsulate the central responsibility of auditors regarding fraud. Auditors focus on the overall integrity of financial statements and ensuring that any potential misstatements, including those arising from fraudulent activities, are addressed adequately during the audit process.