Management Furnishes the Independent Auditor with Information Concerning Litigation, Claims

question 73

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 lawyers provide a legal opinion concerning the policies and procedures adopted by management to identify, evaluate, and account for litigation, claims, and assessments.
• B) 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.
• 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 management send a letter of general inquiry to those lawyers with whom management consulted concerning litigation, claims, and assessments.

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Definitions:

Antiinflammatory Drugs

Medications designed to reduce inflammation, which can lead to improved function and decreased pain in conditions like arthritis.

Muscle Stimulants

Substances or drugs that increase muscle activity, strength, or tone.

Povidone-Iodine

An antiseptic used for skin disinfection before and after surgery, and for treating and preventing infections in wounds.

Chlorhexidine

An antiseptic and disinfectant agent used in various products to reduce bacterial counts on the skin and in the mouth.