Question

In the letter of audit inquiry concerning a description and evaluation of litigation, claims and assessment provided by management to the auditor, which of the following is the client's lawyer not requested to provide?

a. Information on the completeness of management's list.

b. Information on the compliance of the disclosures with GAAP.

c. Information on the likelihood and range of possible losses.

d. Information on any limitations on the lawyer's response.

Answer 1

In an audit inquiry letter concerning litigation and claims, the client's lawyer is not requested to provide information on the compliance of disclosures with GAAP, as this is the auditor's responsibility.

Step-by-step explanation:

In the context of an audit inquiry letter sent to the client's lawyer, the lawyer is generally not asked to provide information on the compliance of the disclosures with Generally Accepted Accounting Principles (GAAP). The lawyer's response typically addresses the completeness of management's list of litigation, claims, and assessments, the likelihood and range of possible losses, and any limitations on the lawyer's response, such as attorney-client privilege. However, it is ultimately the auditor's responsibility to evaluate whether the disclosures comply with GAAP, not the lawyer's.