law suits) an To gather information about possible loss contingencies relating to litigation (ie. auditor may make a spreadsheet schedule lawyers for legal work. It will also show comments on the type of legal work performed. As discussed, why does the auditor agree the total of the lawyer invpices (i.e. bills) to the amount of the legal expenses recorded in the general ledger account? a. To check that all invoices for legal work have been given to the auditor. b. To check that the total amount shown on the invoices agrees to the general ledger balance for of legal expenses. The schedule will list invoices from 25 legal expenses. c. To check legal expenses for overstatement. d. To check legal expenses for understatement. An audit of the Flagler Company, a diamond mining company, brings to light the fact that its 2u equipment has been marked up to the owners' expectation of market values. Such a situation will most likely result in which type of report? a. Disclaimer. b. Review c. Adverse. d. Unqualified, with explanatory paragraph Consider the following statements: Il. A covered member under the AICPA's rules includes individuals on the engagement team, any individual in a position to influence the engagement team, of the engagement. and all professional staff in the office 20 Analytical procedures used in planning an audit 29 The Melancon accounting firm audits XYZ should focus on Co. out of its Boston office. Who, among the following Melancon employees, is a "covered A. Sim, the receptionist who handles many 8. Tim, the records guy who lugs around many gathering evidence in assessing control risk environmental factors. Enhancing the understanding of the entity's business and the t that have occurred since the last audit Aggregating data at a low level and substantiating management's a that are embodied in the financial B. administrative tasks for the XYZ audit s and events team. C. many boxes of records that the audit team must review . C. Bit, the new college accounting graduate, who was added to the XYZ audit team on his first day at Melancon which of the following pairs of accounts would an auditor most likely analyze on the same audit documentation? auditing standards United States of America in which paragraph of the standard unmodified audit report? ds generally accepted in the t payable C. Notes payable and notes receivable D. Interest income and interest expense. B. Auditor's Responsibility