MGMT 642 Chapter 13

fraud auditors should be equally concerned with liabilities being overstated as well as understated

proactive searching for analytical symptoms means taht we are looking for accounts that appear too high or too low or that are unusual in some other way

confirnations with vendors are an effective way to discover unrecorded liabilities

accrued liabiliteis are important accounts to look at when searching for fraud because it is easy to understate liabilities in these accounts

symptoms of unrecorded contingent liabilities can be found by performing analytical procedures on certain FS ratios

some misleading footnotes have no effect on Fs balances

understatement of liability fraud is ususally more difficult to find than overstatement of asset fraud

when searching for unrecorded liabilities, investigating vendors with zero balances would be just as important as investigating vendors with large balances

assets most often improperly capitalized are fixed assets such as property or equipment

FS fraud involving footnote disclosures can be either frauds of omission or frauds of commission

a company that claims to be something it is not in a 10-K report is committing a kind of FS fraud

FS frauds most often occur in large, well-established companies

Documentary symptoms provide the best opportunity to find contingent liabilities that should be recorded

comparing financial relationships such as interest expense and debt, or the amount of warranty expense as a percentage of sales, is not helpful in identifying fraud symptoms of understateing liabilities

one of the best ways to detect inappropriate capitalization of costs is by making comparisons with other similar companies

comparing cash and marketable securities balances with those of similar companies is usually very helpful when looking for analytical symptoms

Which of the following is a primary typedd of transaction that can create liabilities for a company?

when AP related liabilities are understated, purchases and inventory are ofted [blank], or the FS don't balance

recognizing something as a revenue instead of as a liability has a positive effect on the reported FS because:

the most common fraud involving car companies and the warranties they offer would most likely be:

FAs 5 requires contingent liabilities to be recorded as liabilities on teh BS if teh likelihood of loss or payment is:

analytical symptoms of AP fraud most often relate to reported "AP" balances that appear:

proactively searcing for analytical symptoms related to FS fraud menas that we are looking for accounts that appear

when focusing on changes, you should consider changes from period to period in:

overstating cash is usually difficult because:

inadequate disclosure fraud ususally involves:

when examining whether a company hs underrecorded AP, each of the following ratios is helpful except:

each of the following is a symptom relating to understatment of liability frauds except:

each of the following assets is correctly linked with how it can be overstated except:

which of the following factors doe4s not make fraud more difficult to detect?

a form 1099 with missing withholdings (where they should be reported) may be a fraud symptom for which liability account?

In liabilitiy fraud, liabilities are most often:

Which of the following is usually the hardest fraud to detect?

you observe that a company's current ratio is dramatically increasing. This may indicate fraud in that:

of the following, the most difficult account for mgmt to intentionally misstate is:

which of teh following is not a way to underrrecord liabilities

when looking for accounting or documentary symptoms of fraud when a merger occurs, one of the first steps should be:

which of the following is a good place to look for inadequate disclosures?