Pending litigation - audit process, Auditing

Pending Litigation - Audit Process

Since of the inherent uncertainty, in calculating the outcome of legal actions so this is an especially difficult area for the auditor. Several actions are possible that assist in certifying the existence however not essentially the amount of liabilities such will arise out of legal action.

These included:

a) Review of the client system for recording disputes and claims and the process for bringing this to the attention of the board.

b) Review of the managements for instructing solicitors.

c) Examination of the minutes of the board for references to and indications of probable claims.

d) Inspection of bills rendered through the solicitors.

e) Review of correspondence along with solicitors and obtaining a list of all issues referred to solicitors along with an estimate of the possible ultimate liability.

f) Written assurance in the form of a representation letter from a suitable director which he is not aware of any other matters referred to the lawyers another than those disclosed. Whether the auditor is in doubt he should receive a direct confirmation from the Company's lawyers. The request must be send by the client not through the auditor.

Posted Date: 1/28/2013 1:11:48 AM | Location : United States







Related Discussions:- Pending litigation - audit process, Assignment Help, Ask Question on Pending litigation - audit process, Get Answer, Expert's Help, Pending litigation - audit process Discussions

Write discussion on Pending litigation - audit process
Your posts are moderated
Related Questions
An audit helps stay track of where the currency or money is going and makes sure the money is going anywhere it is believed to and not in someone''s pocket. An audit may also help

Co-operative Societies and Parastatals Co-operative Societies An audit in this case is carried out as a general audit except you should notice that the auditor is appoi

Verification Procedures - Long-Term Liabilities a) Received a schedule detailing the sums due at the starting of the year, redemptions and additions and the sum due at the yea

The Department of Higher Education (DoHE) in the Ministry of Education awarded a contract for support of 60 computers to My IT Co. Ltd. and the contract conditions required the del

Classification of Individual Business Risk Individual business risk can be low or high impact and low or high likelihood. Here are some illustrations for a satirical magazine.


Related Parties - Audit Evidence IAS 24 prescribes the disclosures essential to the possibility to draw attention which the financial position and loss or profit of an entity

Auditor's Duties - Audit of Current Assets The auditor's duties can be summarized as follows: a) The accounting ascertaining policies adopted through the entity for pri

Procedures in Evaluating the Work of Expert The auditor must get reasonable assurance which the expert's work constitutes suitable audit evidence in based of the financial inf

Incorporated Banks under Companies Act Banks are incorporated under the Companies Act like any other business but are granted special privileges under the same Companies Act a