Which One of the Following Is Not an Inherent Risk

question 21

Multiple Choice

Which one of the following is not an inherent risk factor in the financial statements?

• A) The company made 3 acquistions during the year in different lines of business.
• B) The company's industry is experiencing downward pricing pressure for its goods and services.
• C) The company's inventory, because of multiple locations, is difficult to count.
• D) The company has hired 3 different chief accounting officers for the year.

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Definitions:

Assignee

A person or entity to whom rights or interests have been transferred by another, known as the assignor.

Contractual Rights

Legal rights granted to parties within a contract, allowing them to demand the performance of certain duties outlined in the agreement.

Assignor

An assignor is a party that transfers rights or interests in a contract or property to another party, known as the assignee.

Negotiable Instruments

A written document guaranteeing the payment of a specific amount of money, either on demand or at a set time, which can be transferred to another party.