Which of the following statements is FALSE?
a. Liability understatements are easier to detect than other types of financial statement fraud.
b. Analytical symptoms related to accounts payable understatements usually relate to reported balances that appear too low.
c. A seasoned fraud examiner will look for unusual liability account changes to detect fraud.
d. Companies in trouble have a strong motivation to understate liabilities.
a
FEEDBACK: a. Correct. Asset overstatements are easier to detect than other types of financial statement fraud because the overstated assets are included on the balance sheet, whereas understated liabilities are not on the financial statements.
b. Incorrect.
c. Incorrect.
d. Incorrect.
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