How it gets into the room
Carbon monoxide reaches living space when combustion products cannot leave through the vent. That happens with a blocked flue, a cracked liner, a failed vent seal on a direct-vent appliance, or a house under enough negative pressure to reverse the flow.
Because it is colourless and odourless, none of those conditions announce themselves. Alarms and annual servicing are the only reliable detection.
Alarm placement
Ontario requires carbon monoxide alarms adjacent to sleeping areas in homes with fuel-burning appliances. An alarm on each level, including near the fireplace itself, is a reasonable step beyond the minimum.
Alarms have a service life, typically printed on the unit. An alarm past its date can fail silently, which is worse than having none because it produces false confidence.
If an alarm sounds
Get everyone outside to fresh air first, then call emergency services from outside. Do not spend time investigating with the family still indoors.
Do not use the appliance again until it has been inspected. An alarm that sounds once and stops is still a finding, because the condition that produced it has not gone anywhere.
Prevention that actually works
Annual servicing of every fuel-burning appliance, an annual chimney inspection including liner condition, and working alarms with current dates cover most of the risk.
Be alert to changes too: a new range hood, a new bathroom fan or newly sealed windows can push a house into negative pressure and start backdrafting an appliance that worked fine for years.