Which of the Following Is Not an Audit Procedure That

question 5

Multiple Choice

Which of the following is not an audit procedure that the independent auditor would perform with respect to litigation,claims,and assessments?

• A) Inquire of and discuss with management the policies and procedures adopted for identifying, evaluating, and accounting for litigation, claims, and assessments.
• B) Obtain from management a description and evaluation of litigation, claims, and assessments that existed at the balance sheet date.
• C) Obtain assurance from management that it has disclosed all unasserted claims that the lawyer has advised are likely to be asserted and must be disclosed.
• D) Confirm directly with the entity's lawyer that all claims have been recorded in the financial statements.

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Definitions:

Subcontractor

An individual or company hired by a primary contractor to perform a specific task as part of a larger project.

Paid

Paid denotes a transaction or situation where money is exchanged for goods, services, or completion of a task.

Builders' Liens

Legal claims made by contractors or suppliers against a property they have worked on or supplied materials for, ensuring payment for their services.

Bankruptcy

A legal status for individuals or entities that cannot repay the debts they owe, leading to legal processes to resolve these debts.