The Primary Reason an Auditor Requests Letters of Inquiry Be

question 34

Multiple Choice

The primary reason an auditor requests letters of inquiry be sent to an entity's attorneys is to provide the auditor with:

• A)a description and evaluation of litigation, claims, and assessments that existed at the date of the balance sheet.
• B)an expert opinion as to whether a loss is possible, probable, or remote.
• C)the opportunity to examine the documentation concerning litigation, claims, and assessments.
• D)corroboration of the information furnished by management concerning litigation, claims, and assessments.

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Definitions:

Rights Vested

Refers to rights that are securely granted to an individual or entity, and cannot be revoked or amended without consent.

Modify or Rescind

To change, alter, or revoke an agreement or contract either partially or completely.

Incidental Beneficiary

A third party who unintentionally benefits from a contract but has no legal right to enforce the contract terms.

Intended Beneficiary

A person for whom a contract is specifically made, who has the right to enforce the terms of the contract, even though they are not a party to it.