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Inherent Risk and Misstatements

State two inherent risk factors that might motivate management to deliberately misstate revenues and receivables and two factors that might cause unintentional misstatements.

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Inherent risk is the risk that a portion of audited financials are materially misstated assuming internal control procedures do not in place to prevent the risk.

Two inherent risk factors that might motivate management to deliberately misstate revenues and receivable include:
1) Motivation to ...

Solution Summary

Inherent risk is the risk that a portion of audited financials are materially misstated assuming internal control procedures do not in place to prevent the risk. The solution states two inherent risk factors that might motivate management to deliberately misstate revenues and receivables and two factors that might cause unintentional misstatements.

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