46) When dealing with fraudulent financial reporting risk for accounts payable,

A) companies will generally tend to overstate accounts payable.

B) companies have used fictitious reductions to accounts payable to overstate net income.

C) accounts payable is rarely a significant risk area for fraudulent financial reporting.

D) it is difficult for the auditor to verify if all liabilities have been recorded if prenumbered receiving reports are used.

47) Proper segregation of functional responsibilities calls for separation of

A) authorization, recording, and custody. B) authorization, execution, and payment.

C) custody, execution, and reporting. D) authorization, payment, and recording.

48) When using the test data approach,

A) application programs tested by the auditor's test data must be different from those used by the client throughout the year.

B) select data may remain in the client system after testing.

C) test data should include data that the client's system should accept or reject.

D) None of the above statements is correct.

49) When designing the audit program and the particular audit tests, the auditor should keep in mind that A) the tests of controls will not vary depending on assessed control risk.

B) auditing standards require that the tests contained in the audit program must be approved by the PCAOB.

C) analytical procedures performed during substantive testing are generally more focused and more extensive than those done as part of planning.

D) the audit program is broken down into two parts-the risk assessment procedures and the tests of details of balances.

50) When the auditor uses tracing as an audit procedure for tests of transactions, she is primarily concerned with which audit objective? A) occurrence B) cutoff C) classification D) completeness