Which of the following situations represents a risk factor that relates to misstatements arising from misappropriation of assets?
A)A high turnover of senior management.
B)A lack of independent checks.
C)A strained relationship between management and the predecessor auditor.
D)An inability to generate cash flow from operations.

Question

Quizplus · Accepted Answer

A lack of independent checks is a risk factor that relates to misstatements arising from misappropriation of assets. This is because without independent checks, there is a greater risk that employees could steal or misuse company assets without detection. The other options (A, C, and D) are not directly related to misappropriation of assets.

Which of the Following Situations Represents a Risk Factor That