Document Type

Honors Project

First Advisor

Dr. Arthur Gumenik

Degree Award Date

Fall 1997


CPAs, Attorneys, Contingent Liabilities, advocates


Accounting | Business | Business Law, Public Responsibility, and Ethics


Auditors are required by the American Institute of Certified Public Accountants to obtain a letter from their clients' legal counsel for the sole purpose of evaluating asserted and unasserted claims against the client. The role of the independent auditor is to attest to the fairness of management's financial statements. Thus, the auditor may never sacrifice independence, and may not serve as an advocate for the client. Attorneys, on the other hand, do serve as advocates. Professional guidelines and standards for auditors and attorneys regarding contingent liabilities differ. Therefore, I wish to investigate whether the inquiries of a client's attorney provide the CPA with sufficient evidence regarding litigation that should be disclosed within the financial statements.