What Type of Transactions Ordinarily Have High Inherent Risk Because

question 11

Multiple Choice

What type of transactions ordinarily have high inherent risk because they involve management judgments or assumptions in formulating accounting balances?

• A)Estimation.
• B)Nonroutine.
• C)Qualified.
• D)Routine.

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Definitions:

Negligent Misrepresentation

A false statement made carelessly that causes someone to suffer damages because they relied on it being true.

Fraudulent Misrepresentation

Intentional deception made by one party to induce another to enter into a contract, resulting in harm or loss.

Ethics Violation

An action or behavior that goes against the moral codes or guidelines established by a profession or organization.

Scienter

Knowledge of wrongdoing or fraudulent intent in the violation of a law or regulation.