During an audit engagement an auditor is expected to communicate with lawyers concerning claims, litigation, and assessments. Listed below are five situations regarding LCA. The last clause or sentence of each case states a conclusion:

1 If the client's lawyer is silent on certain aspects of an attorney's letter request, the auditor may infer the response is complete.

2. Letters of audit inquiry ask for the lawyer's evaluation of the probable outcome of matters reported in his response. If the lawyer's response doesn't contain this evaluation, the auditor should conclude the scope of his examination has been restricted.

3. The Top Dollar Corporation is involved in litigation where the potential liability is so great that an unfavorable judgment at or near the claimed amount would seriously impair its operations. This is how the company's attorneys answered the legal confirmation request:

While no assurance can be given as to the outcome of this action, based upon the facts known by us to date, in the confidence of the attorney/client relationship and otherwise, and our understanding of the present law, we believe the company has good and meritorious defense to the claims asserted against it and should prevail.

On this basis, the independent auditor may issue an unqualified opinion.

4. In situations where the auditor has orally discussed matters involving litigation with the client's legal counsel and has obtained his oral opinion on the outcome of disputed matters, it is not necessary to obtain written confirmation of these oral opinions if the auditor has summarized the attorney's opinion in a memo to the working papers.

5. For the past ten years, XYZ Company has used the services of JJH\&I for its primary legal advice and in many significant matters of litigation. \(95 \%\) of JJH\&I's legal fees originate from services performed for XYZ Company. At December 31, JJH\&I was handling litigation involving great potential liability to the company and has now responded to the auditor's letter of inquiry. Assuming full disclosure, complete reliance can be placed on this response.

Required:
For each case indicate whether you agree or disagree with the conclusion and the reason(s) therefor.