Which of the following is a presumption in every audit regarding significant risks?

In auditing, it is presumed that management override of controls is a significant risk in every audit. This understanding stems from the inherent risk that management might manipulate financial statements, intentionally bypass established controls to present an overly favorable financial position or results of operations. This presumption is critical for auditors as it shapes the approach to risk assessment and the nature of substantive testing required to gather sufficient evidence against such risks.

The significance of this presumption lies in the acknowledgment that no system of internal control is entirely foolproof, and the potential for management to behave opportunistically poses a meaningful threat to the accuracy and reliability of financial reporting. In this context, auditors remain vigilant for indications of management override throughout their evaluation and testing processes.

Other options do not reflect universally accepted audit assumptions regarding significant risks. While errors in financial reporting, the bias of accounting estimates, and the perception of revenue recognition complexity may vary by audit engagement and specific circumstances, management override of controls consistently remains a critical consideration for auditors across all audits.