A lawyer`s letter is a formal business letter sent by a chartered accountant (CPA) to a client`s lawyer. The lawyer`s letter reviews information sent by a company`s management in relation to the company`s ongoing litigation. In cases where the auditor determines that a letter of legal representation from DOJ or other external legal counsel is required to support the legal representation letter for the federal report, the management of the federal reporting unit, in collaboration with its legal department, would request such representation in an audit letter. The Federal Reporting Office would provide the DOJ with its description and assessment of the possible outcome of the case in question and ask the DOJ Attorney to respond directly to the examiner. If the federal reporting office is not sufficiently informed of the case to provide a description and assessment, Department of Justice counsel is encouraged to provide the examiner with a description and assessment directly. These requests to the DOJ must be case-specific and addressed to the DOJ`s lead counsel handling the case. In order to meet the timeliness of the submission of audited financial statements, early coordination between the statutory auditor and the management and legal department of the federal accounting officer should be ensured to determine whether legal safeguards in support of the DOJ are required. Chartered accountants will request this letter for every audit, especially if they have doubts that the management of the company they are auditing has an ongoing lawsuit against them that they have not disclosed. This letter will then provide them with the information they need. 71. Who usually signs the legal letter? One. The Board of Directors.
B. The Audit Partner. C. The CEO of the audited entity. D. Counsel for the Company. A letter of representation from legal counsel to the auditor in response to a management audit request to legal counsel is the auditor`s primary means of confirming information provided by management regarding the accuracy and completeness of litigation, claims and valuations. The statutory auditor should require senior management to send an audit request letter to the legal adviser consulted by senior management on disputes, complaints and valuations. A materiality threshold for the statutory representation letter is usually set in the audit request letter, based on an agreement between management and the auditor. With regard to disputes, complaints and assessments, the auditor must obtain information relating to the case. The information they must collect should be as follows: 45. As part of an audit, a CPA often asks for a letter of representation from the client.
Which of the following statements is not a valid objective of such a letter? One. Provision of evidence. B. Emphasize to the client its responsibility for the fairness of the annual financial statements. C. ensure that a certain account balance is fairly declared if certain normal verification procedures are not performed. D. Potential protection of the CPA from knowledge charges in cases where fraud is subsequently detected in the accounts.
Requests for review should be sent to lawyers, who may be in-house or external counsel who have primary responsibility and knowledge of certain disputes, claims and assessments. Where in-house counsel deal exclusively with disputes, complaints and reviews, their evaluation and response is generally considered appropriate. If in-house and external counsel were involved in the cases, but the in-house counsel assumed primary responsibility for the cases, the in-house counsel`s assessment may well be considered appropriate. However, there may be circumstances in which litigation, claims, and judgments involving significant involvement of outside counsel are of such significance to the financial statements that the auditor should consider asking outside counsel to respond that they have not made a substantive conclusion materially different from the in-house consultant`s opinion. although in-house counsel may have primary responsibility. 11. Which of the following procedures would be least effective in verifying contingent liabilities? A. Read the minutes of the Board of Directors. B.
Review of the bank`s confirmation letter. C. Review of responses to customer confirmations.
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