In analyzing legal expense for Boastman Bottle Company, Bart Little, a public accountant, observes that the company

Question:

In analyzing legal expense for Boastman Bottle Company, Bart Little, a public accountant, observes that the company has paid legal fees to three different law firms during the current year. In accordance with his accounting firm's normal operating practice, Bart requests standard confirmation letters as of the date from each of the three law firms.
On the last day of fieldwork, Bart notes that one of the confirmations has not yet been received. The confirmation from the second law firm contains a statement to the effect that the law firm deals exclusively in registering patents and refuses to comment on any lawsuits or other legal affairs of the client. The confirmation letter from the third law firm states that there is an outstanding unpaid bill due from the client and recognizes the existence of a potentially material lawsuit against the client, but refuses to comment further to protect the legal rights of the client.
REQUIRED
a. Evaluate Bart's approach to requesting the confirmations and his follow-up on the responses.
b. What should Bart do about each of the confirmations?
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...