Choice "D" is correct. During planning, the audit team is required to discuss the potential for material misstatement due to fraud, and the fraud risk factors should be included in that discussion.
Choice "c" is incorrect. The auditor should determine whether and to what extent fraud risk factors are present during the planning stage of the audit, not during the final overall review stage.
Choice "b" is incorrect. The existence of all three fraud risk factors does not necessarily imply that fraud has occurred, although it is indicative of a greater risk of fraud.
Choice "a" is incorrect. Lack of observation of all three fraud risk factors does not necessarily imply that fraud has not occurred, as one factor may be significant enough on its own to result in fraud.