QUESTION 21 The valuation assertion is relevant to auditing both debt and equity. O True O False QUESTION 22 Auditors use checklists because checklists provide satisfaction that the client has performed what it is required to perform. O True O False QUESTION 23 A failure to write-off obsolete inventory when inventory shrinks is an example of theft of inventory. O True O False QUESTION 24 Increase in inventory is one of the fraud risk considerations of the auditor. O True O False QUESTION 25 Capitalized assets should not be expensed as repairs and maintenance. O True O FalseQUESTION 26 A formal budgeting process for long-lived assets is an example of control activities. O True O False QUESTION 27 In the event the auditor has disagreements with the client, the auditor can communicate such disagreements with the audit committee. O True O False QUESTION 28 Kaysik an employee of Simone and Associates, steals $1,500 meant to settle the debt owed by Nimesh a customer. Kaysik applies a $1,500 payment from Mensa towards the debt owed by Nimesh. This is an example of lapping. O True O False QUESTION 29 Reviewing monthly bank reconciliations completed by employees ensures that cash access is limited to appropriate individuals. O True O False QUESTION 30 An inherent risk that management is more likely to overstate inventory should be considered by the auditor. O True O False