When Auditing Contingent Liabilities, the Primary Objective at the Initial

question 82

Multiple Choice

When auditing contingent liabilities, the primary objective at the initial stage of the tests is to determine:

• A) the materiality of any liability.
• B) the likelihood of the liability.
• C) what constitutes adequate disclosure of the liability.
• D) the existence of the liability.

---

Definitions:

Dissociative Amnesia

A disorder characterized by memory gaps regarding personal information, usually due to trauma or stress.

Physical Flight

An escape or avoidance reaction in response to perceived danger or threat, characterized by a physical departure from the situation.

Fugue

A rare psychiatric disorder characterized by reversible amnesia for personal identity, including the memories, personality, and other identifying characteristics of individuality.