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Auditing standards require auditors to presume that revenue recognition has low FFR risk.

a.True
b.False

User Imkost
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Final answer:

The statement is false; auditors must treat revenue recognition with high suspicion due to its susceptibility to fraud.

Step-by-step explanation:

Auditing standards do not require auditors to presume that revenue recognition has low fraud risk. In fact, the presumption is quite the opposite. The risk of fraud in revenue recognition is often considered high because revenue is one of the most important measures to assess the financial performance of a company, making it a significant area for potential manipulation to meet financial targets or expectations. Therefore, auditors are required to have a heightened sense of skepticism when auditing revenue transactions and recognize the risks associated with fraudulent financial reporting (FFR).

User Emcconville
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