Inquiry of a client's lawyer:
A) is required by GAAS.
B) requests that the lawyer identify the nature and reason for any limitation on her response.
C) requires disclosure of any omission made by management in identifying existing and pending litigation.
D) All of the above.

Question

Quizplus · Accepted Answer

A) Inquiry of a client's lawyer is required by GAAS as it provides auditors with legal information that is essential for financial statement audit.

B) When requesting information from a lawyer, the auditor should request that the lawyer identify the nature and reason for any limitation on her response. This helps to ensure that the auditor obtains all relevant legal information required for audit purposes.

C) Inquiring about a client's litigation ensures that management does not omit information that may have a material effect on the financial statements. Auditors ask the lawyer questions to ensure that all existing and pending litigation, claims, and assessments are properly disclosed in the financial statements.

D) Therefore, all of the above are correct statements.

Inquiry of a Client's Lawyer