there is a misstatement. Because this is early in your auditing class, do not worry about specific procedures; just be creative and think about a general strategy an auditor might use. 4-2 Errors and Frauds. Give an example of an error or fraud that would misstate financial statements to affect the accounts as follows, taking each case independently. (Note: "Overstate" means the account has a higher value than would be appropriate under GAAP and "understate" means it has a lower value.) 4.63 a. Overstate one asset; understate another asset. b. Overstate an asset; overstate stockholders' equity. c. Overstate an asset; overstate revenue. d. Overstate an asset; understate an expense. e. Overstate a liability; overstate an expense. f. Understate an asset; overstate an expense g. Understate a liability; understate an expense. 046 4.64 Commpliance with Laws and Regulations. Audit standards distinguish auditors' responsibility for planning procedures for detecting noncompliance with laws and regulations having a direct effect on