rationale for audit risk- expenses are understated

The Group’s operating margin has increased from 4.5% to 6.1% despite a fall in revenue of 3.7%. This is due to a reduction in operating expenses of 4.5% and increase in other operating income of 50%.

ma’am in the above case, audit risk is that: expenses are understated

rationale is which of the two?

– operating margin has increased despite a reduction in revenue OR
– reduction in operating expenses is more than reduction in revenue