a. Do you perceive &ny pluu Johnson? Explain. b. Do you perceive any problems with Johnson's reasoning or the appropriatenes dence used in that reasoning? 159 Chapter 4 Management Fraud and Audit Risk 4.53 Risk of Misstatement in Various Accounts. An auditor must identify the relevant asser- tions about cach significant financial statement account and disclosure and the gather evi- dence to conclude about whether a material misstatement exists for each assertion. The nature of each financial statement account and disclosure contributes to the likelihood that a material misstatement exists. a. In general, which accounts are most susceptible to overstatement? To understatement? b. Why do you think a company could permit asset accounts to be understated? c. Why do you think a company could permit liability accounts to be overstated? d. Which direction of misstatement is most likely: income overstatement or income understatement