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19 Cards in this Set
- Front
- Back
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Contingent liability |
An existing situation that will be resolve when some future event occurs or fails to occur. |
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Three types of contingent liabilities |
1. Probable 2. Reasonably probable 3. Remote |
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Examples of contingent liabilities |
1.Merger 2. Income tax disputes 3. Agreements to repurchase receivables 4. Guarantees of obligations to others |
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How to find contingent liabilities |
"CIRRR"CLE Confirm Inspect Read minutes Review Review tax returns |
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Confirm.. |
guarantees or letters of credit |
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Inspect... |
other document for guarantees or letter of credit |
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Read minutes... |
of meetings of BOD, committees of the board, stockholders |
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Review |
contracts, loan agreements, leases, and correspondence from government agencies |
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Review tax return |
IRS reports, and schedules supporting the clients' tax liability |
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Legal letter |
x |
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Commitments |
x |
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Type I Event |
x |
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Type II Event |
x |
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Dual dating |
x |
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Procedures to look for subsequent event |
x |
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Final evaluation process |
x |
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Review of subsequent events for audit of internal control over financial reporting |
x |
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Subsequent discovery of facts existing at the date of the auditor's report |
x |
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Archiving and retention |
x |
