A CPA Has Received an Attorney's Letter in Which No

question 116

Multiple Choice

A CPA has received an attorney's letter in which no significant disagreements with the client's assessments of contingent liabilities were noted. The resignation of the client's lawyer shortly after receipt of the letter should alert the auditor that:

• A) an adverse opinion will be necessary.
• B) undisclosed unasserted claims may have arisen.
• C) the auditor must begin a completely new examination of contingent liabilities.
• D) the attorney was unable to form a conclusion with respect to the significance of litigation, claims, and assessments.

---

Definitions:

Flagellum

A whip-like structure present in some cells that is used for locomotion or sensory functions.

Amanita

A genus of mushrooms, which includes both highly toxic species, such as the death cap, and edible species.

Saccharomyces

Saccharomyces is a genus of yeasts, most notably including Saccharomyces cerevisiae, widely used in baking, brewing, and wine making.

Ascomycete

A member of the Ascomycota phylum, fungi characterized by their production of spores in sac-like structures called asci.