The Client May Use a Variety of Methods to Understate

The client may use a variety of methods to understate liabilities,interest expense and long-term debt.These include

A) Recording operating leases as capital leases to avoid putting the liability on the balance sheet.
B) Failing to disclose long-term agreements.
C) Failing to disclose special debt arrangements,such as transactions with special purpose entities in an attempt to keep debt arrangements off the books.
D) Failing to disclose related-party transactions.Debt associated with related-parties may carry a higher risk than debt associated with non-related parties.
E) both A and B
F) both B and E
G) both C and D