Although the financial statements of all companies are potentially subject to manipulation, the risk is greater for companies that A. have to make significant judgments for accounting estimates. B. have low amounts of debt. C. are heavily regulated. D. operate in stable economic environments.

Question

Pebbles

Mathematics

11 December, 05:55

Although the financial statements of all companies are potentially subject to manipulation, the risk is greater for companies that A. have to make significant judgments for accounting estimates. B. have low amounts of debt. C. are heavily regulated. D. operate in stable economic environments.

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Mary Haley · Answer 1

a) have to make significant judgments for accounting

Step-by-step explanation:

In a financial Statement it is a responsibility of an auditor to perform functions and audit to obtain assurance about the financial statements. All companies are subject to obtain a financial statement that is free of risk whether caused by fraud or any error. So a company have to make a significant judgment for accounting estimates to overcome or reduce the risk in the financial statement.

Identifying and assessing the risk in a financial statement is the responsibility of an auditor. Auditor have to estimates the accounts information.