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Conversations between the board of directors of Acme Ltd. and the engagement partner of the...

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Accounting

Conversations between the board of directors of Acme Ltd. and the engagement partner of the financial audit, Angelo Del Santo, have revealed that Acme uses three legal firms. Ball and Partners performs all legal work related to property transfers, mortgages, and planning applications. Brond Associates handles all employment matters, such as claims for unfair dismissal and complex employment contracts. Zimmerman and Co. is retained for all other matters, such as agreements relating to products and suppliers and any international matters. What procedures should Angelo perform with respect to legal expenses and potential claims?

Legal letters should be sent to each law firm with a request to send the information back to the auditor

Minutes of the board of directors should be reviewed to search for any legal issues or claims

Entry level staff should be asked if they are aware of any major development or potential lawsuits

Review of legal expenses to determine if there are other legal firms providing work for the client

Rely only on management for determination of the legal accruals required

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