Downwardly-biased valuations contribute to reducing auditor liability because downward biasing reduces the likelihood that there will be an overstatement error, and it is overstatement errors, rather than understatements that usually lead to lawsuits against auditors.

True or False?

Downwardly-biased valuations contribute to reducing auditor liability because downward biasing reduces the likelihood that there will be an overstatement error, and it is overstatement errors, rather than understatements that usually lead to lawsuits against auditors. True False