Which of the following is not a common audit procedure used to search for contingent liabilities?
A)Examine letters of credit.
B)Examine payroll reports.
C)Review internal revenue agent reports.
D)Analyze legal expense.

Question

Quizplus · Accepted Answer

Payroll reports are not typically used to search for contingent liabilities. The other answer choices are common audit procedures used to search for contingent liabilities. Examining letters of credit may reveal potential liabilities related to guarantees or warranties. Reviewing internal revenue agent reports may identify tax liabilities or potential legal disputes. Analyzing legal expenses may uncover pending lawsuits or threatened litigation that could result in contingent liabilities.

Which of the Following Is Not a Common Audit Procedure