Final answer:
An auditor must evaluate several factors related to third-party litigation against a client, such as the timing of the event causing legal action, the likelihood of an unfavorable outcome, and any indications of uncertainty regarding potential losses. However, the jurisdiction where the litigation is resolved is the factor that is not directly relevant to the auditor's evidential assessment.
Step-by-step explanation:
When an auditor is obtaining evidence about third-party litigation against a client, they must gather information on several factors to assess the potential impact of the litigation on the client's financial statements. The auditor must consider the period in which the underlying cause for the legal action occurred to determine if it relates to the current audit period. Additionally, evaluating the probability of an unfavorable outcome is crucial, as this may have a direct effect on the client's financial obligations and disclosures. Another important factor is the existence of a situation indicating uncertainty as to the possible loss; this could lead to a contingent liability. However, the jurisdiction in which the matter will be resolved, although it may influence legal proceedings, does not itself bear directly on the financial statements and is hence the factor that the auditor need not consider as part of the evidential matter related to the litigation.