Management's attitude toward aggressive financial reporting and its emphasis on meeting projected profit goals most likely would significantly influence an entity's control environment when:
A)external policies established by parties outside the entity affect its accounting practices.
B)management is dominated by one individual.
C)internal auditors have direct access to the board of directors and the entity's management.
D)the audit committee is active in overseeing the entity's financial reporting policies.

Question

Quizplus · Accepted Answer

Management dominated by one individual can significantly influence an entity's control environment, especially in terms of aggressive financial reporting and emphasis on meeting profit goals, due to the concentration of decision-making power and potential lack of checks and balances.

Management's Attitude Toward Aggressive Financial Reporting and Its Emphasis on Meeting