Question

Which of the following is not ordinarily considered a factor indicative of increased financial reporting risk when an auditor is considering a client's risk assessment policies? A. Salaried sales personnel.

B. Implementation of a new information system.
C. Rapid growth of the organization.
D. Corporate restructuring

Answer 1

Salaried sales personnel are not ordinarily considered a factor indicative of increased financial reporting risk. The implementation of a new information system, rapid growth of the organization, and corporate restructuring can be considered factors indicative of increased financial reporting risk.

Step-by-step explanation:

When considering a client's risk assessment policies, salaried sales personnel are not ordinarily considered a factor indicative of increased financial reporting risk. Salaried sales personnel refer to salespeople who receive a fixed salary instead of commissions. This factor does not directly impact a client's risk assessment policies or financial reporting risk. On the other hand, the implementation of a new information system, rapid growth of the organization, and corporate restructuring can be considered factors indicative of increased financial reporting risk. These factors may introduce new complexities, uncertainties, and potential for errors in the financial reporting process.