Page 472 True false 1-10

1.Fraud auditors should be equally concerned with liabilities overstated as well as understated.

2. Proactive searching for analytical symptoms means that we are looking for accounts that appear too high or two low or that are unusual in some other way.

3. Confirmations with vendors that the company owes money to are an effective way to discover unrecorded liabilities.

4. Accrued liabilities are important accounts to look at when searching for fraud because it is easy to understate liabilities in these accounts.

5. Symptoms of unrecorded contingent liabilities can be found by performing analytical procedures on certain financial statement ratios.

6. Some misleading footnotes have no effect on financial statement balances

7. Understatement of liability fraud is usually more difficult to since and overstatement of asset fraud.

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

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

10. Financial statement fraud involving footnote disclosures can be either fraud of omission or fraud of commission.