If during the process of identifying litigation,claims,and assessments involving the company that may increase the risk of material misstatement,the auditor assesses a risk of material misstatement due to a potential contingent liability,the auditor should
A)seek direct communication with the company's internal legal counsel
B)seek direct communication with the company's external legal counsel
C)seek direct communication with the company's management
D)seek direct communication with the company's board of directors

Question

Quizplus · Accepted Answer

The auditor should seek direct communication with the company's external legal counsel to obtain information about litigation, claims, and assessments involving the company that may increase the risk of material misstatement. External legal counsel can provide an authoritative perspective on the potential impact of these matters on the financial statements.

If During the Process of Identifying Litigation,claims,and Assessments Involving the Company