When Dealing with Fraudulent Financial Reporting Risk for Accounts Payable

question 81

Multiple Choice

When dealing with fraudulent financial reporting risk for accounts payable,

• A) companies will generally tend to overstate accounts payable.
• B) it is difficult for the auditor to verify if all liabilities have been recorded if prenumbered receiving reports are used.
• C) companies have used fictitious reductions to accounts payable to overstate net income.
• D) accounts payable is rarely a significant risk area for fraudulent financial reporting.

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Definitions:

Spontaneous

Occurring without apparent external cause; impromptu or unplanned.

Reproductive Payoffs

Benefits or advantages obtained through reproducing, often in the context of evolutionary biology, referring to the success of passing genes to the next generation.

Evolutionary

Pertains to the gradual process of biological change and development over successive generations.

Extraversion

A personality trait characterized by high levels of enthusiasm, energy, sociability, talkativeness, and assertiveness.