Sunday, October 2, 2011

#107- Audit tips on reviewing legal expenses

This post intend to share with our Accouting & Auditing blogs readers on a number of tips while performing the review of audit client's legal expense account, as follows:

a) Review the invoice & billing details sent by the audit client's lawyer to identify any law suits / legal cases that's against the audit client [ note: disclosure is required in the financial statement, if the exposure is material]

b) To investigate further if there's vague and inadequate descriptions on the billings from the lawyers.

c) Review the engagement letter / contract entereted into by audit client with the lawyers to find out how detailed the firms’ fee bills should be.

d) From internal control perspective, audit client should have adequate and consistent policy for reviewing legal fee bills once they came in. [ i.e. determination of the verifier and reviewers of the legal fee bills, etc]

e) Please obtain confirmation from audit client's lawyer on the on-going legal cases/ law suits to identify if there's any material exposure.

1 comment:

Brisbane accountant said...

All the information shared on auditing tips are really helpful for beginner accountant.