Which of the following disclaimers of liability included withina response to an auditor's confirmation request would allowthe auditor to rely on the confirmation as appropriate auditevidence for an audit of a nonissuer?No.11a.Information is obtained from electronic data sources, whichmightnotcontaincertaininformationintherespondent'spossession.b.Information in the confirmation maynotbe relied upon by therecipient.c.Information isnotguaranteed to be accurate or current andcould be a matter of opinion.d.Information is furnished as a matter of courtesy without a dutytodosoandwithoutresponsibility,liability,orwarranty,expressed or implied. Show
Which of the following statements in an attorney's legal letterrequires further investigation?No.12 Get answer to your question and much more 2019 AICPA Released Questions – Auditing and Attestation (Hard) - Which of the following statements in an attorney's legal letterrequires further investigation?No.12 Get answer to your question and much more 2019 AICPA Released Questions – Auditing and Attestation (Hard) - An auditor has set the materiality level for the financialstatements as a whole at $125,000. Which of the followingmisstatementswouldtheauditormostlikelyconsidermaterial?No.13 Get answer to your question and much more 2019 AICPA Released Questions – Auditing and Attestation (Hard) - 2019 AICPA Released Questions – Auditing and Attestation (Hard) - Upload your study docs or become a Course Hero member to access this document Upload your study docs or become a Course Hero member to access this document End of preview. Want to read all 41 pages? Upload your study docs or become a Course Hero member to access this document Tags Financial audit, Auditor s report What Is an Attorney's Letter?An attorney's letter is a formal business letter sent by a certified public accountant (CPA) to a client's attorney. The attorney's letter verifies the information sent by the management of a company pertaining to pending litigation of the company. The purpose of the attorney's letter is to inform and certify to the auditor of any legal action against the client that could result in an adverse financial impact on the company's financial statements. Key Takeaways
Understanding an Attorney's LetterThe attorney's letter makes up a significant part of the financial audit process. When auditors are conducting a review of a company's financials, they need to take into consideration any litigation that may have a negative impact on the financials. Therefore, they need a full account of any pending lawsuits the company faces. Auditors will request this letter for any audit and particularly if they have a doubt that the management of the company they are auditing has litigation pending against it that they have not disclosed. This letter will then provide them with the information that they need. Essentially, the letter seeks to confirm that the information provided by a client is accurate and complete. Upon receipt of a response from an attorney, a CPA can better determine whether a client’s legal situation has a material impact on the information reported in its financial statements. This is of special care when possible losses from damages awarded as the result of a lost lawsuit are a possibility. The payout would hurt the company's financial strength, therefore, shareholders and potential investors need to be made aware of these risks. Accounting and Auditing ConsiderationsIt is primarily management's responsibility to put in place procedures to account for any litigation, claims, and assessments against the company when preparing financial statements in compliance with generally accepted accounting principles (GAAP). In relation to litigation, claims, and assessments, the auditor needs to obtain information related to the matter. The information that they will need to gather will need to be the following:
An attorney's letter is meant to verify all of the above information that would come from management. The letter is usually only needed when the financial loss would be material, which would be decided on between the auditor and the company. What are four pieces of information should you request in an attorney letter concerning pending or threatened litigation?[Ordinarily the information would include the following: (1) the nature of the litigation, (2) the progress of the case to date, (3) how management is responding or intends to respond to the litigation (for example, to contest the case vigorously or to seek an out-of-court settlement), and (4) an evaluation of the ...
What information is typically requested in a legal letter to an entity's attorney?What information is typically requested in a legal letter to an entity's attorney? A list and evaluation of any pending or threatened litigation to which the attorney has devoted substantial attention.
What is the purpose of an attorney letter?An attorney's letter is a formal business letter sent by a certified public accountant (CPA) to a client's attorney. The attorney's letter verifies the information sent by the management of a company pertaining to pending litigation of the company.
What is a legal representation letter in audit?A legal confirmation or legal representation letter is an inquiry sent by an auditor (with their client's approval) to a law firm engaged by the client for the purpose of determining the status of litigation, claims and assessments pertaining to the audited client.
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Which of the following statements in an attorney’s legal letter requires further investigation?
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