When the proper disclosure in the financial statements of material contingencies is through footnotes, the footnote should describe the nature of the contingency to the extent it is known and:
A) the auditor's opinion as to the expected outcome.
B) the steps client has taken to ensure that it doesn't recur.
C) the opinion of legal advisers or management as to the expected outcome.
D) the opinion of an outside independent party, such as an appraiser, as to the expected outcome.

Question

Quizplus · Accepted Answer

The disclosure in footnotes should describe the nature of the contingency to the extent it is known and the opinion of legal advisers or management as to the expected outcome. The auditor's opinion should not be included as it is not the auditor's job to provide an opinion on the contingency itself. The steps the client has taken to ensure that it doesn't recur and the opinion of an outside independent party are not relevant to the disclosure of material contingencies.

When the Proper Disclosure in the Financial Statements of Material