Which of the following risk factors suggests a heightened level of risk of material misstatement?
A)Having a stable product.
B)The departure of key personnel of a company.
C)Few immaterial related-party transactions.
D)Declining a merger with another company.

Question

Quizplus · Accepted Answer

The departure of key personnel of a company suggests a heightened level of risk of material misstatement, as they may have had significant involvement in the financial reporting process and their absence may lead to errors or fraud going undetected. The other options do not necessarily indicate a heightened level of risk of material misstatement.

Which of the Following Risk Factors Suggests a Heightened Level