Which of the following would the auditor be most concerned about regarding a heightened risk of intentional misstatement?
A) senior management emphasizes that it is very important to beat analyst estimates of earnings every reporting period
B) senior management emphasizes that budgeted amounts for expenses are to be achieved for each reporting period or explained in the variance analysis report
C) senior management emphasizes that job rotation is a worthwhile corporate objective
D) senior management emphasizes that job evaluations are based on performance

Question

Quizplus · Accepted Answer

Senior management's emphasis on beating analyst estimates of earnings may lead to intentional misstatements in financial statements. This emphasis can create a pressure to manipulate financial results, which is a red flag for auditors.

Which of the Following Would the Auditor Be Most Concerned