Management Furnishes the Independent Auditor with Information Concerning Litigation, Claims

question 49

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 undertake a reconsideration of matters of litigation, claims, and assessments with which they were consulted during the period under examination.
• B) Request that client management send a standard inquiry to the client's attorney letter to those lawyers with whom management consulted concerning litigation, claims, and assessments.
• C) 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.
• D) Request that client management engage outside attorneys to suggest wording for the text of a footnote explaining the nature and probable outcome of existing litigation, claims, and assessments.

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Definitions:

Stratum Basale

The basal layer of the epidermis, which is in charge of producing new skin cells.

Nail Bed

The skin beneath the nail plate that provides nourishment and a foundation for nail growth.

Nail Matrix

Epithelial tissue resting on dermis under the proximal end of a nail; produces most of the nail.

Body Odor

Body odor results from the bacterial breakdown of sweat in various parts of the body, producing a noticeable smell.