One of the more common techniques used to fraudulently misstate financial statements involves the overstatement of long-lived assets. Overstatements can be carried out a number of ways. One of the problems with this type of misstatement is that top management may be involved with or at least be aware of the scheme.

Select the items that represent potential fraud schemes. Check all that apply.

Sales of assets are not recorded and proceeds are misappropriated.

a. Costs that should have been expensed are improperly capitalized.

b. Inappropriate residual values or lives are assigned to the assets, resulting in miscalculation of depreciation.

c. The person responsible for recording depreciation expense each year inadvertently failed to record depreciation for a building acquired three years ago.

d. Impairment losses on long-lived assets are not recognized.

e. Amortization of finite intangible assets is not recognized.

f. Assets that have been sold are not removed from the books.

g. Land was not depreciated.

h. The new addition to a building was accidentally expensed by the bookkeeper.