Why is risk in financial misstatements too important not to recognize?
A) Because the employees need good information to ask for appropriate raises from.
B) So suppliers will know how much to charge for future deliveries.
C) Due to SEC regulations.
D) Users of the financial statements will be harmed if they are not correct.

Question

Quizplus · Accepted Answer

Financial statements are used by stakeholders to make important decisions about the company. If the statements are misstated, it can lead to incorrect decisions and potential harm to users of the statements. Therefore, recognizing the risk of financial misstatements is critical for maintaining accurate and reliable financial reporting. Choices A, B, and C do not accurately capture the importance of recognizing the risk of financial misstatements.

Why Is Risk in Financial Misstatements Too Important Not to Recognize