Litigation and claims, Auditing

Litigation and claims

ISA 501 Audit Evidence - Additional Consideration for exact Items requires such auditors should carry our process to become aware of any material litigation or claims including the entity. That procedure would involve:

(i) Make suitable enquiries of management involving obtaining representations

(ii) Examine management and board minutes for indications of possible claims

(iii) Examine correspondence along with lawyers involving bills rendered

(iv) Examine legal expense account

(v) Receive a list of matters refereed t lawyers along with the company's estimates of possible liabilities

(vi) Review the client's system of recording claims involving the process for bringing them to the attention of management.

Whenever litigation or claims have been well known or wherever the auditor believes that they may exist, the auditor should seek direct contact along with the entity's lawyers.

The letter should be prepared through management and sent through the auditor. It should identify the litigation and management's assessment of the outcome, and request such the lawyer verify directly to the auditor the reasonableness of the statement and to give the auditor along with further information whether the list is incomplete. Whether the lawyer is probable to respond to a more common enquiry, after that would be better lawyers are usually unwilling to do this unless there is nothing to report.

In complex condition the auditor may require to meet the lawyer, along with the client's permission and preferably along with the client in attendance. Wherever permission to communicate along with lawyers is refused, a qualified audit opinion will usually follow.

Posted Date: 1/28/2013 1:17:48 AM | Location : United States

Related Discussions:- Litigation and claims, Assignment Help, Ask Question on Litigation and claims, Get Answer, Expert's Help, Litigation and claims Discussions

Write discussion on Litigation and claims
Your posts are moderated
Related Questions
internal control procedures to be put in place when purchasing a motor vehicle

Financial Statements Rely All Financial providers people must be sure that the financial statements can be relied upon. It should be noted that: 1. The auditor himself must be

International, Assurance Auditing, Standards Board (IAASB) The prologue to the International Standards on Quality Control, Auditing, Assurance and Related Services is issued to

a) Would King & Queen be liable to EFL? Provide specific case references to support your answer.

Q. What do you understand by Yellow Book? Yellow Book - Written by GENERAL ACCOUNTABILITY OFFICE, yellow book sets forth standards to be followed in auditing FINANCIAL STATEMEN

State four factors considered determining sufficiency of audit evidence

Conformity and Conservatism - External Auditor Report Conformity Although the user of the accounts expects the accounts to conform to general accepted accounting princi

Audit Procedures - Intangible Assets The auditor's process as far as goodwill is relating would involve as: a) Vouching for details as per the buy agreement of the values

Irregularities: Irregularities can be explained as intentional distortions of financial statements for whatever reason and also as misappropriation of possessions whether or no