Which of the following is a contingent liability with which an auditor is particularly concerned?

Question

Quizplus · Accepted Answer

A contingent liability is a potential liability that may or may not occur, depending on the outcome of a future event. An auditor is particularly concerned with contingent liabilities that are probable and reasonably estimable. Choice A describes a legal claim against the company, which meets both of these criteria and would be a contingent liability of concern to the auditor. Choices B, C, and D do not provide enough information to determine if they are contingent liabilities, or if they are probable and reasonably estimable.

Which of the Following Is a Contingent Liability with Which