To Uncover Liabilities from Actual or Potential Litigation,which of the Following

question 17

Multiple Choice

To uncover liabilities from actual or potential litigation,which of the following procedures is required by CAS 501?

• A)Sending an inquiry letter to suppliers with which the auditee normally does business
• B)Sending an inquiry letter prepared to the auditee's lawyers.
• C)Sending confirmations to the insurance companies with which the auditee has coverage.
• D)Sending bank confirmations to all financial institutions with which the auditee has done business.

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Definitions:

Cyclical Industries

Industries whose performance is heavily influenced by the economic cycle, experiencing higher sales during economic booms and lower sales during recessions.

Sell Government Bonds

The act of disposing of government debt securities in the financial market.

Monetary Authorities

The institutions responsible for regulating a country's money supply and exchange rates, typically a central bank or currency board.

Aggregate Demand

Aggregate demand represents the total demand for goods and services within an economy at a given overall price level and in a given time period.