If a company amortizes or depreciates a category of its fixed assets over a longer period than in the past or over a longer period than the average for the industry, it is a signal that the company may be: 21. Understating expenses via improper capitalization of expenses. Understating expenses by removing invoices from the accounting records. Understating expenses via improper deferral of expenses. Understating expenses by overstating inventory to decrease the amount reported for cost of goods sold