Litigation, Claims & Assessments

Management is responsible for identifying, evaluating, & accounting for litigation, claims, & as-
sessments (I, c, & a)

Management asserts that all I, c, & a have been appropriately considered & are properly re-
flected in the financial statements & related disclosures

The auditor obtains evidence relating to

The existence of conditions indicating an uncertainty arising from I, c, & a
·1 The period in which the cause for the uncertainty occurred
·2 The probability of an unfavorable outcome
·3 The amount or range of potential loss

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Litigation, Claims, & Assessments (continued)

The auditor's procedures will include
Inquire of management policies & procedures for identifying, evaluating, & accounting for
I, c, & a
·4 Obtain from management a description and evaluation of I, c, & a existing at the balance
sheet date
Examine documents, including correspondence & invoices from lawyers concerning I, c,
&a
Obtain written assurance from management that all unasserted claims that are probable
of assertion have been disclosed
Obtain letter from client's attorney regarding I, c, & a

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Evidence - Module 3