Which of the following forms of communication serves as a critical part of auditors' examination of litigation,claims,and assessments?
A) Attorney letter.
B) Engagement letter.
C) Management letter.
D) Written representations.

Question

Quizplus · Accepted Answer

An attorney letter is a critical form of communication for auditors when examining litigation, claims, and assessments. This letter provides the auditor with information related to the likelihood of a loss, the estimate of the loss, and the potential outcome of the litigation or claim. The attorney letter is considered a primary source of evidence for the auditor and is often required by auditing standards. The engagement letter is a form of communication that establishes the terms of the audit engagement. The management letter is a communication from the auditor to management that contains recommendations for improving internal control and financial reporting. Written representations are a form of communication from management to the auditor that confirms the accuracy and completeness of the financial statements and disclosures. While all of these forms of communication may be important in the audit process, the attorney letter is specifically relevant to the examination of litigation, claims, and assessments.

Which of the Following Forms of Communication Serves as a Critical