Management's philosophy and operating style influence the risk of material misstatements in the financial statements.

Question

Quizplus · Accepted Answer

Management's philosophy and operating style can impact the level of risk that exists within an organization. For example, if management has a conservative approach to accounting and reporting, there may be less risk of material misstatements in the financial statements. On the other hand, if management has a more aggressive approach, there may be a higher risk of material misstatements. Therefore, the answer is true - the management's philosophy and operating style can influence the risk of material misstatements in the financial statements.

Management's Philosophy and Operating Style Influence the Risk of Material