An Auditor Should Obtain Evidential Matter Relevant to All the Following

question 28

Multiple Choice

An auditor should obtain evidential matter relevant to all the following factors concerning third-party litigation against a client except the:

• A)period in which the underlying cause for legal action occurred.
• B)probability of an unfavourable outcome.
• C)jurisdiction in which the matter will be resolved.
• D)existence of a situation indicating an uncertainty as to the possible loss.

---

Definitions:

Contribution To Overhead

The portion of revenue that exceeds direct costs and contributes to covering a company's fixed expenses.

Service Departments

Divisions within a company that support other departments but do not directly contribute to revenue generation, such as maintenance and HR.

Operating Departments

Departments within an organization directly involved in its primary revenue-generating activities.