Final answer:
The statement is true; audits are expected to provide a higher degree of assurance for detecting fraud than for detecting errors, as fraud usually involves more complex and intentional actions requiring a heightened level of scrutiny and evidence.
Step-by-step explanation:
The statement that audits are expected to provide a higher degree of assurance for the detection of material frauds than is provided for an equally material error is True. The primary objective of an audit is to provide reasonable assurance that the financial statements are free of material misstatement, whether due to fraud or error. However, due to the inherent nature of fraud, which usually involves sophisticated and deliberate actions such as forgery, collusion, and intentional omissions, detecting fraud is generally more complex and requires more evidence and a higher level of skepticism than detecting errors, which are often accidental or due to a misunderstanding of accounting principles.
Auditors have specific responsibilities relating to fraud in an audit of financial statements. This includes obtaining sufficient, appropriate evidence about the assessed risks of material misstatement due to fraud. Therefore, although both the detection of fraud and errors are important, there is indeed a heightened focus on fraud in the audit process