Which of the Following Is Not an Audit Procedure That

question 33

Multiple Choice

Which of the following is not an audit procedure that the independent auditor would perform with respect to litigation, claims, and assessments in audit procedures for subsequent events and contingent liabilities?

• A)Inquire of and discuss with management the policies and procedures adopted for identifying, evaluating, and accounting for litigation, claims, and assessments.
• B)Obtain a legal letter.
• C)Obtain a written representation from management that all litigation, asserted and unasserted claims, and assessments have been disclosed.
• D)Confirm directly with the entity's lawyer that all claims have been recorded in the financial statements.

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Definitions:

Price-Earnings Ratio

A financial metric comparing the present price of a corporation's stock to its earnings per share to assess whether the stock is under or overvalued.

Stock Price Appreciation

The increase in the market price of a company's shares over time.

Earnings Per Share

A company's profit divided by the outstanding shares of its common stock, indicating the company's profitability on a per-share basis.

Continuing Operations

Part of a company's business that is expected to continue operating into the foreseeable future, excluding any discontinued operations.