For companies in industries where significant judgements and estimates are involved, the risk of fraudulent financial reporting is:

Question

Quizplus · Accepted Answer

Companies in industries where significant judgements and estimates are involved, such as fair value accounting, are more susceptible to the risk of fraudulent financial reporting due to the subjectivity and complexity involved in these estimates. Therefore, the risk for fraudulent financial reporting is higher for such entities.

For Companies in Industries Where Significant Judgements and Estimates Are