Inherent risk associated with officer compensation is frequently set high because officers have motive and opportunity to take advantage of their high-ranking offices in the form of excessive compensation.

Question

Quizplus · Accepted Answer

Inherent risk refers to the risk that exists within an organization or process regardless of the internal controls in place. Officer compensation is often set high, and this can create a motive for officers to take advantage of their positions to receive excessive compensation. Therefore, inherent risk associated with officer compensation is frequently set high.

Inherent Risk Associated with Officer Compensation Is Frequently Set High