The Scope of an Audit Is Not Restricted When an Attorney's

question 111

Multiple Choice

The scope of an audit is not restricted when an attorney's response to an auditor as a result of a client's letter of audit inquiry limits the response to:

• A) Matters to which the attorney has given substantive attention in the form of legal representation.
• B) An evaluation of the likelihood of an unfavorable outcome of the matters disclosed by the entity.
• C) The attorney's opinion of the entity's historical experience in recent similar litigation.
• D) The probable outcome of asserted claims and pending or threatened litigation.

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Definitions:

Consulting Revenues

Income generated by a firm through the provision of advisory or consultancy services.

Additional Investment

Extra funds invested into a business by its owners or shareholders over and above the initial or previous investments.

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenue.

Owner's Equity

The residual interest in the assets of an entity after deducting liabilities, representing the ownership interest in the company.