Which of the following parties has the responsibility for designing and maintaining policies and procedures to identify,evaluate,and account for contingencies?
A)Management.
B)The auditor.
C)The audit committee.
D)The client's attorney.

Question

Quizplus · Accepted Answer

Management is responsible for designing and maintaining policies and procedures to identify, evaluate, and account for contingencies. This includes developing and implementing a system to identify potential contingencies, assessing their likelihood and potential impact on the financial statements, and recording them in the financial statements when they meet the criteria for recognition. The auditor is responsible for evaluating the adequacy of management's policies and procedures related to contingencies and assessing the financial statement disclosures related to contingencies. The audit committee provides oversight of the financial reporting process but typically does not have direct responsibility for designing policies and procedures related to specific financial statement items. The client's attorney may provide legal advice related to contingencies, but is not responsible for designing or maintaining policies and procedures related to the financial reporting process.

Which of the Following Parties Has the Responsibility for Designing