Which of the Following Statements Extracted from a Client's Lawyer's

question 914

Multiple Choice

Which of the following statements extracted from a client's lawyer's letters concerning litigation, claims, and assessments most likely would cause the auditor to request clarification?

• A) "I believe that the possible liability to the company is nominal in amount."
• B) "I believe that the action can be settled for less than the damages claimed."
• C) "I believe that the plaintiff's case against the company is without merit."
• D) "I believe that the company will be able to defend this action successfully."

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Definitions:

Tangible Asset

Physical assets that can be touched and have a finite monetary value, such as buildings, machinery, and equipment.

Property, Plant, Equipment

Property, plant, and equipment (PP&E) are long-term tangible assets that are used in the operations of a business and are subject to depreciation.

Disposal

The process of disposing an asset by selling, exchanging, retiring it, or by destroying it.

Sale

A transaction between two parties where the buyer receives goods, services, or assets in exchange for money or other consideration.