The Client May Use a Variety of Methods to Understate

question 28

Multiple Choice

The client may use a variety of methods to understate expenses and payables.These include

• A)failure to review accounts payable at the end of the year
• B)failure to record payroll expense or fringe benefits at year end
• C)failure to review accrued expenses at year end
• D)rationalization of expenses
• E)failure to record long term liabilities
• F)both A and D
• G)both B and E

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Definitions:

Mistake Of Fact

A misunderstanding of a fact that is material to a contract, which can render the agreement voidable if the mistake is mutual between both parties.

Legal Assent

The agreement or consent to the terms of a contract, recognizing that all parties understand and accept the conditions as legally binding.

Fraudulent Misrepresentation

A false statement of a material fact made by one party to another party, which has the intent to deceive and induce the other party to enter into a contract.

Disclaimer

A statement that denies something, especially responsibility or a warranty in a contractual context.