An example of a factor that provides the incentive for management to misstate revenue cycle assertions would be ________.
A)realistic sales targets within the firm
B)strong support from top management of an ethical culture
C)pressures to overstate revenues to achieve revenue or profitability targets that were not achieved
D)pressures to accurately report revenues to achieve revenue or profitability targets that were achieved

Question

Quizplus · Accepted Answer

Pressure to overstate revenues to achieve revenue or profitability targets that were not achieved would provide an incentive for management to misstate revenue cycle assertions. This can occur due to a variety of reasons, such as pressure from the board of directors or investors, or to maintain the company's stock price. However, realistic sales targets, strong ethical culture, and pressures to accurately report revenues to achieve targets already achieved do not provide an incentive for management to misstate revenue cycle assertions.

An Example of a Factor That Provides the Incentive for Management