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Statement on Auditing Standards AICPA American Institute of Certified Public Accountants April 1988 The Auditor's Responsibility to Detect and Report Errors and Irregularities ( Supersedes Statement on Auditing Standards No. 16, AICPA, Professional Standards, vol. 1, AU sec. 327.) 1. This Statement provides guidance on the independent auditor's responsibility for the detection of errors and irregularities in an audit of financial statements in accordance with generally accepted auditing standards. It describes factors that influence the auditor's ability to detect errors and irregularities and explains how the exercise of due care should give appropriate consideration to the possibility of errors or irregularities. It also provides guidance on the auditor's responsibility to communicate detected matters both within and outside the entity whose financial statements are under audit. Definition of Errors and Irregularities 2. The term errors refers to unintentional misstatements or omissions of amounts or disclosures in financial statements. Errors may involve — • Mistakes in gathering or processing accounting data from which financial statements are prepared. Copyright © 1988 by the American Institute of Certified Public Accountants, Inc. 1211 Avenue of the Americas, New York, N. Y. 10036- 8775 1234567890 AudS 898 Issued by the Auditing Standards Board 53