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:

Division

A mathematical operation that is the inverse of multiplication; it involves splitting a quantity into equal parts.

Simplify

Reducing an expression or equation to its simplest form, often by combining like terms and applying arithmetic operations.

Polynomial

An algebraic expression consisting of variables and coefficients, involving operations of addition, subtraction, multiplication, and non-negative integer exponents.

Factor

A number or quantity that divides another number or algebraic expression evenly, without leaving a remainder.