An account is at a higher risk of misstatement when it requires:
A)estimation
B)both a and b
C)complex calculations
D)simple valuation techniques

Question

Quizplus · Accepted Answer

When an account requires both estimation and complex calculations, it is considered to be at a higher risk of misstatement. This is because estimation involves a degree of judgment, and complex calculations increase the likelihood of errors. Therefore, accounts that require both estimation and complex calculations are more susceptible to misstatement compared to accounts that only require simple valuation techniques.

An Account Is at a Higher Risk of Misstatement When