Management Furnishes the Independent Auditor with Information Concerning Litigation, Claims

question 99

Multiple Choice

Management furnishes the independent auditor with information concerning litigation, claims and assessments. Which of the following is the auditor's primary means of initiating action to corroborate such information?

• A) Request that client management engage outside legal counsel to suggest wording for the text of a footnote explaining the nature and probable outcome of existing litigation, claims and assessments.
• B) Request that client management send a letter of general inquiry to those lawyers with whom management consulted concerning litigation, claims and assessments.
• C) Request that client lawyers undertake a reconsideration of matters of litigation, claims and assessments with which they were consulted during the period under examination.
• D) Request that client lawyers provide a legal opinion concerning the policies and procedures adopted by management to identify, evaluate and account for litigation, claims and assessments.

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Definitions:

Linear Programming

A mathematical technique used for allocation of resources and optimization of outcomes in decision making, typically involving minimizing costs or maximizing revenues.

Constraint

A limitation or restriction that impacts the performance, process, or execution of a project, activity, or system.

Limitations

The restrictions or constraints that may affect the feasibility or effectiveness of a process, system, or action.

Competitive Bidding

A procurement process where suppliers submit bids to win a contract to supply goods or services, often leading to lower prices.