If the client has set unreasonable objectives or if the performance measurement system encourages aggressive accounting,the auditor will
A)increase inherent risk of financial statement misstatements.
B)lower inherent risk of financial statement misstatements.
C)increase control risk of financial statement misstatements.
D)lower control risk of financial statement misstatements.

Question

Quizplus · Accepted Answer

If the client has set unreasonable objectives or if the performance measurement system encourages aggressive accounting, there is a higher risk of financial statement misstatements. Increasing inherent risk is the appropriate response for the auditor to reflect this higher risk in the overall risk assessment.

If the Client Has Set Unreasonable Objectives or If the Performance