Current professional auditing standards make it clear that management, not the auditor, is responsible for identifying and deciding the appropriate accounting treatment for contingent liabilities.

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Quizplus · Accepted Answer

This is true. According to auditing standards, management is responsible for identifying, evaluating, and accounting for contingent liabilities. The auditor's role is to assess management's evaluation and ensure that it is reasonable and adequately disclosed in the financial statements.

Current Professional Auditing Standards Make It Clear That Management, Not