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A capital lease is presented as periodic rent expense rather than interest and depreciation. A deferred tax asset is reduced to zero with a valuation allowance. A stock option is expensed even though the fair value of the underlying stock on the date of grant was the same as the option's exercise price. Revenues for up-front fees are deferred rather than recognized immediately.

48. The audit of financial statements includes the initial approach of addressing fraud. How must an auditor address fraud in the planning stage? (Points: 4) The auditor must test for fraud in the planning stage by sampling accounts. The auditor must consider the likelihood of fraud existing in the company in the planning stage. The auditor must realize that most people are honest and not automatically assume that fraud exists when planning the audit. The auditor must not be aggressive in its initial approach to fraud as trust may be lost by the client.

49. Which of the following creates an opportunity for fraud to be committed in an organization? (Points: 4)

ACC 562 EDU Successful Learning / acc562edu.com  

FOR MORE CLASSES VISIT www.acc562edu.com 1.Developing an understanding of the client's business and industry is essential to proficiency a...

ACC 562 EDU Successful Learning / acc562edu.com  

FOR MORE CLASSES VISIT www.acc562edu.com 1.Developing an understanding of the client's business and industry is essential to proficiency a...

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