Your Client Has Returned to You the Representation Letter That

question 27

Essay

Your client has returned to you the representation letter that they sent to their lawyer. The letter contains the following statement from the client's lawyer:
"the directors seem to underestimate the likelihood of losing the case, and the potential financial settlement amount. We believe that there is little chance of successfully defending the matter, and expect that there will be amounts payable in the vicinity of $3.million, not $1.million. We do however remind you that the matter is only in preliminary stages and could still go either way".
Has the auditor collected this evidence in the appropriate way? What should the auditor do in regards to the information provided by the lawyer?

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Definitions:

Frontotemporal NCD

A type of neurocognitive disorder primarily affecting the frontal and temporal lobes of the brain, characterized by significant changes in behavior, personality, and/or language.

Deterioration

The process of becoming progressively worse.

Social Behavior

Actions or reactions of an individual in response to external or internal stimuli, within a social context.

Elders

Older individuals, often regarded with respect or veneration, who may hold positions of authority or influence within a community or family.