Management's attitude toward aggressive financial reporting and its emphasis on meeting projected profit goals most likely would significantly influence an entity's control environment when
A) External policies established by parties outside the entity affect its accounting practices.
B) Management is dominated by one individual.
C) Internal audit personnel have direct access to the board of directors and the entity's management.
D) The audit committee is active in overseeing the entity's financial reporting policies.

Question

Quizplus · Accepted Answer

When management is dominated by one individual, their attitude towards aggressive financial reporting can significantly influence the control environment, as there may be less oversight and more opportunity for manipulation to meet profit goals.

Management's Attitude Toward Aggressive Financial Reporting and Its Emphasis on Meeting