Lower inherent risk traits are found where _______.
A)technological developments are a minimal factor in the valuation of the client's assets
B)the client's industry is experiencing a period of decline
C)the client has insufficient working capital and is at risk of violating loan contracts
D)the client's location is at risk of facing natural disasters, such as hurricanes and flooding

Question

Quizplus · Accepted Answer

Lower inherent risk traits are found where technological developments are a minimal factor in the valuation of the client's assets. This is because technological developments can quickly alter the value of assets and create uncertainty in financial statements. The other options (B, C, and D) all indicate higher levels of inherent risk due to external factors affecting the client's business operations.

Lower Inherent Risk Traits Are Found Where _______