What is Letter of inquiry to legal counsel?
In short
A letter of inquiry to legal counsel (a 'lawyer's letter') is sent by management, at the auditor's request, asking the entity's lawyers to confirm information about litigation, claims and assessments directly to the auditor.
Key takeaways
- It is the auditor's main corroborating evidence for management's assessment of legal contingencies.
- A lawyer's refusal to respond is a scope limitation that may lead to a qualified opinion or a disclaimer.
- It isn't required in a review engagement.
Where it's tested
AUD: Evidence: Types & Procedures — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
An auditor selects recorded sales transactions from the sales journal and examines the related shipping documents and customer orders. This procedure primarily tests which assertion?