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NEW QUESTION: 1
The scope of an audit is not restricted when an attorney's response to an auditor as a result of a client's
letter of audit inquiry limits the response to:
A. The probable outcome of asserted claims and pending or threatened litigation.
B. The attorney's opinion of the entity's historical experience in recent similar litigation.
C. An evaluation of the likelihood of an unfavorable outcome of the matters disclosed by the entity.
D. Matters to which the attorney has given substantive attention in the form of legal representation.
Answer: D
Explanation:
Explanation/Reference:
Explanation:
Choice "A" is correct. The scope of an audit is not restricted when an attorney's response is limited to
matters to which the attorney has given substantive attention in the form of legal representation. The
attorney may also limit his or her response to matters that are considered individually or collectively to be
material.
Choices "B", "C", and "D" are incorrect. The scope of an audit may be restricted when an attorney's
response is limited to:
1. An evaluation of the likelihood of an unfavorable outcome of the matter disclosed by the entity. (The
attorney's response should also address the nature of the claim, the progress to date, and the intended
response.)
2. The attorney's opinion of the entity's historical experience in recent similar litigation. (The attorney's
response should address the current situation, which may not parallel historical experience).
3. The probable outcome of asserted claims and pending or threatened litigation. (The attorney's response
should also address the nature of the claim, the progress to date, and the intended response, as well as
unasserted claims).
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DRAG DROP
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Explanation:
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