For contingent liabilities, an auditor is required to review which of the following?
A) legal expense accounts for unexpected fluctuations
B) minutes of meetings of those charged with governance
C) correspondence with taxation authorities
D) all of the above

Question

Quizplus · Accepted Answer

An auditor is required to review all of the above items for contingent liabilities. Legal expense accounts for unexpected fluctuations may relate to potential lawsuits or legal claims, which are one type of contingent liability. The minutes of meetings of those charged with governance may provide information about potential contingencies that have not yet been recorded in the financial statements. Correspondence with taxation authorities may relate to potential tax liabilities or contingencies. Therefore, reviewing all of these items is necessary to obtain sufficient audit evidence regarding contingent liabilities.

For Contingent Liabilities, an Auditor Is Required to Review Which