In the context of ISA 240 (The Auditor‘s Responsibility to Consider Fraud and Error in, an Audit of Financial Statements): Define: -Fraud and Error

(i) Fraud
This term is used to refer to irregularities involving the use of criminal deception to obtain unjust or illegal advantage. For instance misappropriation of stock by the store-keeper, followed by altering of records.
(ii) Error
This refers to an oversight by a staff in the recording of a transaction, for instance an accountant, whereby an incorrect value for money is entered in the books unintentionally. In this case the intention of obtaining illegal advantage may not be the cause of such an oversight.

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