An inherent risk related to asset impairment is management is not typically interested in writing down the asset value.

Question

Quizplus · Accepted Answer

This statement is true. Writing down the value of an asset to reflect a lower fair value or impaired value can negatively impact the financial statements, which may not be in the best interest of management. However, failing to recognize the impairment could also result in material misstatements in financial statements and potentially even legal or regulatory consequences.

An Inherent Risk Related to Asset Impairment Is Management Is