[rnin1ee]

Q. The scope of the audit is NOT restricted when an attorney’s response to an auditor as a result of a client’s letter of audit inquiry limits response to:

a. The probable outcome of asserted claims and pending or threatened litigation

b. Matters to which the attorney has given substantive attention in the form of legal representation

c. An evaluation of the likelihood of an unfavorable outcome of the matter disclosed by the entity

d.The attorney’s opinion of the entity’s historical experience in recent similar litigation

Answer is

b.

Information below is from an answer sheet of Becker review.

The scope of an audit may be restricted when an attorney’s response limited to

1. An evaluation of the likelihood of an unfavorable outcome of the matter disclosed by the entity

2.The attorney’s opinion of the entity’s historical experience in recent similar litigation

3.The probable outcome of asserted claims and pending or threatened litigation

From what I understand, lawyers may limits their replies to matters to which given substantial attention.

What I DON’t understand is why this won’t restrict the scope of audit while other three above do.

Maybe I just don’t understand the language of “restriction” on the scope of the audit.

Could somebody help me on this?

FAR - 74, 74, 84
REG - 79
AUD - 77
BEC - 71, 80

[mkrohmer]

In my opinion # 1 and 2 in the explanation would cause a scope limitation because it implies that the response by the attorney may be limited to only a specific issue. When I read the question I answered it as A (#3 in the explanation) but once I thought about it, it fits my explanation above because of the word assert (meaning stated). So my reasoning is that the correct answer encompasses all issues the lawyer has dealt with instead of just ones know to the auditor.

BEC - 83 (1/23/15)
FAR - 80 (4/3/15)
REG - 88 (5/14/15)
AUD - 81 (7/3/15)

[Author]

Replies