The Auditor Should Be Aware of the Possibility That Management

question 3

True/False

The auditor should be aware of the possibility that management may be manipulating earnings by inappropriately expensing capital items or inappropriately capitalizing expense items.

---

Definitions:

Tenancy-At-Will Lease

A lease that may be terminated by the parties at any time.

Tenancy-At-Sufferance Lease

A lease that is created when a tenant who was lawfully in possession of a leased property remains in possession of that property unlawfully after the lease ends because the person with the power to evict him failed to do so.

Landlord-Tenant Relationship

A legal arrangement between the owner of a property (landlord) and a person who has been granted temporary possession (tenant).

Integral Part

An essential component or element of something that is necessary for its completeness or functioning.