Elizabeth Johnson, CPA, has completed the audit of notespayable and other liabilities for Valley River Electrical Services and now plans to auditcontingent liabilities and commitments.a. Distinguish between contingent liabilities and commitments and explain why bothare important in an audit.b. Identify three useful audit procedures for uncovering contingent liabilities thatJohnson will likely perform in the normal conduct of the audit, even if she had noresponsibility for uncovering contingencies.c. Identify three other procedures Johnson is likely to perform specifically for the purpose of identifying undisclosed contingencies to help her obtain evidence about thecompleteness presentation and disclosure objective.
Elizabeth Johnson, CPA, has completed the audit of notes
payable and other liabilities for Valley River Electrical Services and now plans to audit
a. Distinguish between contingent liabilities and commitments and explain why both
are important in an audit.
b. Identify three useful
Johnson will likely perform in the normal conduct of the audit, even if she had no
responsibility for uncovering contingencies.
c. Identify three other procedures Johnson is likely to perform specifically for the purpose of identifying undisclosed contingencies to help her obtain evidence about the
completeness presentation and disclosure objective.
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