The auditor's primary means of obtaining corroboration of management's information concerning litigation is a
A) Letter of audit inquiry to the entity's lawyer.
B) Letter of corroboration from the auditor's lawyer upon review of the legal documentation.
C) Confirmation of claims and assessments from the other parties to the litigation.
D) Confirmation of claims and assessments from an officer of the court presiding over the litigation.

Question

Quizplus · Accepted Answer

The auditor can obtain corroboration of management's information concerning litigation by sending a letter of audit inquiry to the entity's lawyer. This letter will ask for information about the nature and status of the litigation, the amount of any claims or assessments, and the likelihood of an unfavorable outcome. The response to the letter will provide evidence that the auditor can use to evaluate the adequacy of management's disclosures about the litigation in the financial statements. Therefore, choice A is the best option.

Option B is incorrect because the auditor's lawyer is not involved in the audit process and cannot provide corroboration of management's information. Option C and option D may provide some information about the claims and assessments from other parties, but these sources are not typically used to corroborate management's information directly.

The Auditor's Primary Means of Obtaining Corroboration of Management's Information