The cost of equity increases with increasing financial leverage in order to compensate the stockholders for the higher degree of financial risk

An auditor most likely obtains an understanding of a new client to

A. Make constructive suggestions concerning improvements to the client's internal control. B. Develop an attitude of professional skepticism concerning management's financial statement assertions. C. Evaluate whether the aggregation of known misstatements causes the financial statements taken as a whole to be materially misstated. D. Identify areas of audit emphasis.

Personality refers to a person's unique psychological makeup and how it consistently influences the way a person responds to his or her environment

Indicate whether the statement is true or false