Final answer:
In auditing contingent liabilities, examining customer confirmation replies is the least effective procedure as it is less relevant to potential future liabilities involving legal matters or other external conditions rather than direct customer interactions.
Step-by-step explanation:
When auditing contingent liabilities, the procedure that would be least effective is examining customer confirmation replies. Contingent liabilities are potential liabilities that may occur depending on the outcome of an uncertain future event. The auditor's main concern is to verify the existence, disclosure, and proper handling of these liabilities.
1) Reading the minutes of the board of directors can provide information on any current or potential legal issues, guarantees, or other conditions that may result in contingent liabilities.
2) Reviewing the bank confirmation letter might confirm the existence of guarantees or other financial arrangements that could lead to contingent liabilities.
3) Examining customer confirmation replies is less relevant for contingent liabilities, as these typically involve external parties like legal matters, rather than direct customer interactions.
4) Examining invoices for legal services provides information on legal proceedings and potential liabilities that may arise from lawsuits or legal counsel.