The chief accountant was hired by the CEO three years ago and they are close friends. The chief accountant keeps the CEO updated about the company’s financial progress and discusses major accounting issues with the CEO. However, they both say that the CEO does not attempt to override the chief accountant’s professional judgment. Both the CEO and chief accountant are very friendly to the auditors and the directors. These managers have a good relationship with the board of directors.

Question:

Is this an inherent risk?

Answer rating: 100% (QA)

Yes the close personal relationship between the CEO and the chief accountant as well as their signif... View the full answer