Question

The most difficult type of misstatement to detect fraud is based on.

• A. Related party purchases
• B. Related party sales
• C. The restatement of sales
• D. Omission of a sales transaction from being recorded

Answer 1

The correct option is D Omission of a sales transaction from being recorded

Option D is correct.

The most difficult type of misstatement to detect fraud is based on omission of a sales transaction from being recorded.

Omission is completely/partially not recording a transaction. When a transaction has a error and the trial balance might not tally which might help in identifying if there is any error.

But in case of omission the trial balance will tally regardless, hence, its difficult to find out such errors.