An Auditor Should Request That an Audit Client Send a Letter

question 452

Multiple Choice

An auditor should request that an audit client send a letter of inquiry to those attorneys who have been consulted concerning litigation, claims, or assessments. The primary reason for this request is to provide:

• A) The opinion of a specialist as to whether loss contingencies are possible, probable, or remote.
• B) A description of litigation, claims, and assessments that have a reasonable possibility of unfavorable outcomes.
• C) An objective appraisal of management's controls adopted for identifying and evaluating legal matters.
• D) The corroboration of the information furnished by management concerning litigation, claims, and assessments.

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Definitions:

Nonverbal Expression

Involves the conveyance of thoughts or feelings without the use of spoken words, often through body language, facial expressions, and gestures.

Privacy Rights

Legal entitlements related to the protection of personal information from unauthorized access, use, or disclosure.

Fundamental Right

A basic human right recognized by a legal system that is protected from governmental infringement.

Substantive Due Process

A legal doctrine that protects certain fundamental rights from government interference, asserting that laws infringing on these rights must be justified by a compelling interest.