Answered: Which of the following would not be…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Which of the following would not be considered confidential information obtained in the
course of an engagement for which the client’s consent would be needed for disclosure?
a. Information about whether a consulting client has paid the CPA’s fees on time.
b. The actuarial assumptions used by a tax client in calculating pension expense.
c. Management’s strategic plan for next year’s labor negotiations.
d. Information about material contingent liabilities relevant for audited financial statements

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

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