Auditors, as Part of Completing the Audit, Will Request the Client

question 78

Multiple Choice

Auditors, as part of completing the audit, will request the client to send a letter of inquiry to those attorneys the company has been consulting with during the year under audit regarding legal matters of concern to the company.The primary reason the auditor requests this information is to:

• A)determine the range of probable loss for asserted claims.
• B)corroborate of information supplied by management concerning litigation, claims, and assessments.
• C)outside opinion of probability of losses in determining accruals for contingencies.
• D)outside opinion of probability of losses in determining the proper footnote disclosure.

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Definitions:

Unexpectedly High

A level or measure that exceeds what was anticipated or forecasted.

Natural Rate

The long-term rate of unemployment around which the unemployment rate fluctuates, or the rate of output expected when resources are fully employed.

Aggregate Demand

The complete demand for all categories of goods and services in an economy, evaluated at a given price level for a particular period.