The client may use a variety of methods to understate expenses and payables.These include
A)failure to review accounts payable at the end of the year
B)failure to review payroll expense or fringe benefits at year end
C)failure to review accrued expenses at year end
D)capitalization of expenses
E)failure to record long term liabilities
F)both A and B
G)both D and E

Question

Quizplus · Accepted Answer

Capitalization of expenses (D) and failure to record long-term liabilities (E) are methods to understate expenses and payables by either misclassifying expenses as assets or omitting liabilities from the financial statements.

The Client May Use a Variety of Methods to Understate