Which of the following statements extracted from a client's lawyer's letters concerning litigation, claims, and assessments most likely would cause the auditor to request clarification?

Question

Quizplus · Accepted Answer

Choice "B," is correct. T,he auditor is concerned with preventing an understatement of contingent liabilities. T,he auditor would therefore request clarification before determining that a reduction in such liability (from damages claimed to some lesser amount) is reasonable. C,hoices "A,", "C,", and "D," are incorrect. W,hen a lawyer asserts that a contingent liability is immaterial ("nominal") or improbable ("without merit" and "successful defense likely"), it is unlikely that the auditor would require further clarification.

Which of the Following Statements Extracted from a Client's Lawyer's