In discussing audit procedures for contingent liabilities, we

discussed 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 the

amount 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.