1-Search the EDGAR database to find a 10-Kthat reports a contingent liability. Write a paragraph summarizingone of the liabilities found in the financial statements. Did thecompany disclose the liability in the footnotes only, or did itrecognize the liability in the financial statements?
2-What procedures might the auditors use to search forthe contingent liabilities listed in part (1)? Explain the steps inthe procedure in detail, as well as how they would provide theoutcome desired.
What additional procedure could be performed? List the procedure,explain how it is performed, and discuss why it would beappropriate.
