Auditors will need to perform more substantive tests than normal to obtain sufficient appropriate evidence that a financial instrument is fairly stated if which of the following conditions exist?
A. Management is objective and transparent in their assumptions.
B. Management's key assumptions are subject to volatility.
C. The entity's portfolio is composed of only stocks issued by Fortune 100 firms traded in an active market.
D. The entity does not have control weaknesses in its valuation processes.
Answer: Management's key assumptions are subject to volatility
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