1.Auditors send a letter to the company's attorneys to obtain evidence about possible contingent liabilities.What means ofgathering evidence is this?

a.Observation.d.Inquiry

b.Reperformance.e.Comparison

c.Analysis.

2. In discussing audit procedures for contingent liabilities, we ndiscussed the "analysis of legal expense".Say the auditor asks the controller for the file containing attorney invoices [i.e. bills from lawyers].In reviewing the invoices, the auditor notes that they sum to [total] $1,000,000, while theamount shown in the general ledger account for "legal expense" totaled $1,500,000.In this context, what did we suggest as the auditor's chief concern?

a.Too much is being spent on attorney fees.

b.There is likely a misclassification of an expense.

c.The auditor did not receive all the attorney invoices.

d.Legal expense is overstated.