Which one of the following has the most affect on the reliability of financial statements?
A) The size of the client
B) The industry of the client
C) The client's internal control structure.
D) The client's trend of earnings.

Question

Quizplus · Accepted Answer

The client's internal control structure is the most important factor affecting the reliability of financial statements. This is because internal controls are designed to ensure that financial information is accurate and complete, and that assets are safeguarded. Without effective controls, there is a greater risk of errors and fraud going undetected, which can lead to misstatements in the financial statements. While the size and industry of the client and the trend of earnings can also affect the reliability of financial statements, they are less critical than the internal control structure.

Which One of the Following Has the Most Affect on the Reliability