ISA 240 and Auditors' Responsibilities:
ISA 240 clarifies that the responsibility for establishing and maintaining internal controls rests with the organization's management, not the auditors.
Auditors are responsible for evaluating the adequacy of internal controls and assessing fraud risks during an audit.
Why B is Correct:
Management is accountable for designing anti-fraud controls, while auditors provide oversight and recommendations based on their assessments.
[References:, ISA 240, “The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements”., , , ]
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