Steve Woods performed an audit on the ABC corporation and issued an unqualified report. Steve performed...

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Accounting

Steve Woods performed an audit on the ABC corporation and issuedan unqualified report. Steve performed the audit with due care andin accordance with GAAS. Three months later, he discovers on thenews that the CEO of ABC, has been stealing small amounts ofinventory. The amount was not material compared to the overallinventory of the corporation. The CFO, Mr. Big called Steve and heasks for Steve to refund the audit fees because Steve did notperform the audit properly and discover this fraud. How shouldSteve Woods, auditor, respond? Please write at least 300 words.

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An auditor is responsible for obtaining reasonable assurance that the financial statements taken as whole are free from material misstatement whether caused by error or fraud The general objective is to find whether the accounts show a true and fair view The primary responsibility for prevention and detection of See Answer

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