Kathy Choi, a public accountant, has completed the audit of notes payable and other liabilities for Valley River Electrical Services Ltd. and now plans to audit contingent liabilities and commitments.

Required

a. Distinguish between contingent liabilities and commitments, and explain why both are important in an audit.

b. Identify three useful audit procedures for uncovering contingent liabilities that Choi would likely perform in the normal conduct of the audit even if she had no responsibility for uncovering contingencies.

c. Identify three other procedures Choi would likely per¬ form for the purpose of identifying undisclosed contingencies.