When auditing Accounts payable, the auditor is more concerned about the possibility of understatements than overstatements.

Question

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The auditor is more concerned about the possibility of understatements because these can result in an understated liability, which could create a financial misstatement in the financial statements. Overstatements, on the other hand, may result in an overstatement of liabilities or expenses, which could still be corrected and result in a lower net income, but would not create as significant of a financial misstatement.

When Auditing Accounts Payable, the Auditor Is More Concerned About