Question

The primary reason an auditor requests letters of inquiry be sent to an entity's attorneys is to provide the auditor with?

1) a description and evaluation of litigation, claims, and assessments that existed at the date of the balance sheet.
2) an expert opinion as to whether a loss is possible, probable, or remote.
3) the opportunity to examine the documentation concerning litigation, claims, and assessments.
4) corroboration of the information furnished by management concerning litigation, claims, and assessments.

Answer 1

4) corroboration of the information furnished by management concerning litigation, claims, and assessments.

The primary goal of an auditor requesting inquiry letters from an entity's attorneys is to verify the information provided by management regarding litigation, claims, and assessments.

Step-by-step explanation:

The primary reason an auditor requests letters of inquiry to be sent to an entity's attorneys is to corroborate the information furnished by management concerning litigation, claims, and assessments. The primary goal of an auditor requesting inquiry letters from an entity's attorneys is to verify the information provided by management regarding litigation, claims, and assessments.

While a description and evaluation of the suits, as well as an expert opinion on the loss contingency, are important, the over-arching goal is to verify the accuracy and completeness of the information provided by the entity's management. This will involve examining relevant documentation and potentially seeking additional information from the attorneys to gain assurance regarding the entity's financial statements.