1.The audit step most likely to reveal the existence of contingent liabilities is

a.A review of vouchers paid during the month following the year-end

b.Accounts payable confirmations

c.An inquiry directed to legal counsel

d.Mortgage-note confirmation

2.When obtaining evidence regarding litigation against a client, the CPA would be least interested in determining

a.An estimate of when the matter will be resolved

b.The period in which the underlying cause of the litigation occurred

c.The probability of an unfavorable outcome

d.An estimate of the potential loss

3.The letter of audit inquiry addressed to the client's legal counsel will not ordinarily be

a.Sent to a lawyer who was engaged by the audit client during the year and soon thereafter resigned the engagement

b.A source of corroboration of the information originally obtained from management concerning litigation, claims and assessments

c.Limited to references concerning only pending or threatened litigation with respect to which the lawyer has been engaged

d.Needed during the audit of clients whose securities are not registered with the SEC

4.When a contingency is resolved immediately subsequent to the issuance of a report that was qualified with respect to the contingency the auditor should

a.Insist that the client issue revised financial statements

b. Inform the audit committee that the report cannot be relied upon

c. Take no action regarding the event

d. Inform the appropriate authorities that the report cannot be relied upon