The Auditing Standards Require the Auditor to Design Audit Procedures

question 52

Multiple Choice

The auditing standards require the auditor to design audit procedures and plan the audit to identify litigation,claims,and assessments involving the company that may increase the risk of material misstatement.The auditor does this by

• A)asking management and others in the company,including the in-house legal counsel about potential legal liabilities
• B)reviewing minutes of meetings of those charged with monitoring and correspondence between the company and its internal counsel
• C)reviewing the expense accounts related to legal expense
• D)reviewing tax returns
• E)investigating customer complaints
• F)both A and B
• G)both A and C
• H)both D and E

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Definitions:

Partnership

A legitimate enterprise setup in which management duties and profits are divided among two or more persons.

UPA

Uniform Partnership Act; a law that governs the operations of partnerships in the United States.

Capital City Partnership

A collaboration or alliance formed between businesses, government entities, and/or non-profit organizations aimed at promoting economic development in a city's capital area.

Assets Distribution

The process of allocating a company's or estate's assets to creditors, shareholders, or heirs according to legal agreements or laws.