subsequently .
47 . Which of the following would most likely be considered intentional misapplication of accounting principles on financial statements ? ( Points : 4 )
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 )
Management demands financial success .