Shortly before the conclusion of the audit, the auditor obtains letters from the

Question

Shortly before the conclusion of the audit, the auditor obtains letters from the client’s attorney(s). The primary reason for doing so is to obtain:

A. information about potential unrecorded legal fees owed to the attorney(s) as of year-end.

B. information about litigation, claims, and assessments against the client that were settled during the period under audit.

C. corroboration of information provided by client management supporting the year-end balance in the legal services expense account.

D. information about litigation, claims, and assessments against the client that were settled during the subsequent-events period.

E. corroboration of information provided by client management regarding pending or threatened litigation, claims, and assessments against the client.

Explanation / Answer

Answer:

E. corroboration of information provided by client management regarding pending or threatened litigation, claims, and assessments against the client.

The auditor obtained letter from the client's attorney so as to obtain corroboration of information provided by client management regarding pending or threatened litigation, claims, and assessments against the client. The auditor is required to do due diligence so as to assure that the financial statements report a true and fair view of the affairs of the company.

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.