Which one of the following is NOT an audit procedure that is commonly used to search for contingent liabilities?
A) Analyse legal expense for the period under audit.
B) Review the minutes of directors' and shareholders' meetings.
C) Inquiries of management (orally and in writing).
D) Review the current year's tax return.

Question

Quizplus · Accepted Answer

Reviewing the current year's tax return is not a commonly used audit procedure to search for contingent liabilities. Contingent liabilities are potential future obligations that may or may not become actual liabilities, and may not necessarily have a tax impact. The other three options (analysing legal expenses, reviewing minutes, and making inquiries of management) are commonly used procedures for identifying contingent liabilities.

Which One of the Following Is NOT an Audit Procedure