What is loss contingency?
A)An existing condition or situation involving uncertainty to possible loss that will ultimately be resolved when one or more future events occur or fail to occur.
B)An opinion expressed by the auditor when the auditor concludes that the financial statements are presented fairly, in all material respects, in accordance with the applicable financial reporting framework.
C)Lack of confidence in the audit process that intended users place in the financial statements.
D)A statement in the auditor's report that is required by generally accepted auditing standards.

Question

Quizplus · Accepted Answer

A loss contingency is an existing situation or condition where there is uncertainty about possible loss to an entity that will be resolved in the future. This may involve pending litigation, environmental issues, or potential tax liabilities, among other things. The outcome of the contingency depends on future events that are not entirely within the entity's control, and it may represent a material or significant risk to their financial statements.

What Is Loss Contingency