Why is the risk of overstating income greater than the risk of underreporting profits?

High risk, high return. Risk is directly proportional to income. The uncertainty among risk, production purpose and labor result has two meanings: one definition emphasizes the uncertainty of risk as income.

Risks and benefits exist, and taking risks is the premise of obtaining benefits; Revenue is the cost and reward of risk. The essential relationship between the above risks and returns can be expressed as the following formula: expected return = risk-free interest rate+risk compensation.

Extended data

Distinguish between main business income and other business income:

The main business income is the basic income generated by the manufacturing industry's main business such as selling products, products in process and providing industrial services.

Other business income The total inflow of economic benefits in daily activities such as selling goods, providing labor services and transferring the right to use assets other than business income. Such as selling materials, materials and packaging materials, transferring intangible assets, leasing fixed assets, leasing packaging materials, transporting and selling waste materials, etc.