January 1976 Statement on
Issued by the Auditing Standards Executive Committee
American Institute of
Certified Public Accountants
Inquiry of a Client's Lawyer Concerning
Litigation, Claims, and Assessments 1
1. This Statement provides guidance on the procedures an independent
auditor should consider for identifying litigation, claims,
and assessments and for satisfying himself as to the financial accounting
and reporting for such matters when he is performing
an examination in accordance with generally accepted auditing
2. Management is responsible for adopting policies and procedures
to identify, evaluate, and account for litigation, claims,
and assessments as a basis for the preparation of financial statements
in conformity with generally accepted accounting principles.
1 This Statement supersedes the commentary, " Lawyers' Letters," January 1974
( AU section 1001), and auditing interpretations of section 560.12 of SAS No.
1 on lawyers' letters, January 1975 ( AU section 9560.01-. 26). It amends section
560.12( d) to read as follows: " Inquire of client's legal counsel concerning
litigation, claims, and assessments ( see SAS No. 1 2 ) ."
Copyright © 1976 by the
American Institute of Certified Public Accountants, Inc.
1211 Avenue of the Americas, New York, N. Y. 10036