If a lawyer refuses to furnish corroborating information regarding litigation, claims, and assessments, the auditor should:
A)honor the confidentiality of the client-lawyer relationship.
B)consider the refusal to be a scope limitation.
C)seek to obtain the corroborating information from management.
D)disclose this fact in a footnote to the financial statements.

Question

Quizplus · Accepted Answer

The refusal to furnish corroborating information represents a limitation in the scope of the audit, and the auditor should communicate this limitation in the audit report. The auditor should also seek to obtain the corroborating information from alternative sources, such as management or third-party advisers, to the extent possible. However, the auditor cannot simply ignore the limitation and must take appropriate steps to address it in the audit report. Choosing option A would not be appropriate as the confidentiality of the client-lawyer relationship is important, but it cannot be allowed to impede the auditor's responsibilities. Option C may be feasible, but it does not necessarily address the scope limitation. Option D is incorrect as simply disclosing the fact in a footnote would not provide sufficient information to users of the financial statements to understand the nature and extent of the limitation.

If a Lawyer Refuses to Furnish Corroborating Information Regarding Litigation