An audit inquiry letter to legal counsel is a formal request for information from an auditor to a company’s legal counsel. The purpose of this letter is to obtain information about potential legal matters that may have a material impact on the company’s financial statements.
In this article, we will provide you with templates, examples, and samples of audit inquiry letters to legal counsel. These resources will help you to draft a well-written letter that will effectively communicate your request for information.
Audit Inquiry Letter to Legal Counsel
Dear [Legal Counsel Name],
We are conducting an audit of [Company Name] for the year ended [Date]. As part of our audit procedures, we are requesting your assistance in providing certain information to us.
Specifically, we would like to request the following:
* A list of all pending or threatened legal proceedings, including the nature of the proceedings, the parties involved, and the status of the proceedings.
* A description of any contingent liabilities that may arise from these proceedings.
* A copy of any legal opinions that have been obtained regarding these proceedings.
We understand that you may have a duty to maintain confidentiality with your clients. However, we believe that the information we are requesting is necessary for us to complete our audit. We will treat all information provided to us as confidential and will only use it for the purposes of our audit.
We would appreciate it if you could provide us with the requested information by [Date]. If you have any questions or concerns, please do not hesitate to contact us.
Thank you for your cooperation.
Sincerely,
[Your Name]
How to Write Audit Inquiry Letter To Legal Counsel
An audit inquiry letter to legal counsel is a formal request for information from an attorney representing a client who is being audited. The purpose of the letter is to obtain information that will help the auditor to assess the client’s financial statements and to determine whether there are any potential legal issues that could affect the audit.
When to Send an Audit Inquiry Letter
An audit inquiry letter should be sent when the auditor has identified a potential legal issue that could affect the audit. This could include issues such as:
- Litigation or threatened litigation
- Government investigations
- Regulatory compliance
- Environmental matters
- Intellectual property disputes
What to Include in an Audit Inquiry Letter
An audit inquiry letter should include the following information:
- The auditor’s name and contact information
- The name and address of the attorney
- The date of the letter
- A brief description of the audit
- A list of the specific information that the auditor is requesting
- A request for a response by a specific date
How to Write an Audit Inquiry Letter
When writing an audit inquiry letter, it is important to be clear and concise. The letter should be written in a professional tone and should avoid using technical jargon. It is also important to be specific about the information that is being requested.
Example of an Audit Inquiry Letter
The following is an example of an audit inquiry letter:
[Your Name] [Your Address] [Your City, State, Zip Code] [Your Phone Number] [Your Email Address]
[Date]
[Attorney Name]
[Attorney Address]
[Attorney City, State, Zip Code]
Dear Mr./Ms. Attorney:
I am writing to you on behalf of [Audit Firm Name], the auditors of [Client Name]. We are currently conducting an audit of [Client Name]’s financial statements for the year ended December 31, 2023.
During the course of our audit, we have identified a potential legal issue that could affect the audit. Specifically, we have been informed that [Client Name] is currently involved in a lawsuit with [Plaintiff Name].
We would appreciate it if you could provide us with the following information:
* A copy of the complaint and any other relevant pleadings
* A summary of the facts of the case
* Your assessment of the merits of the case
* Your estimate of the potential liability, if any
We would also appreciate it if you could provide us with any other information that you believe would be relevant to our audit.
Please provide us with this information by [Date].
Thank you for your cooperation.
Sincerely,
[Your Name]
FAQs about Audit Inquiry Letter To Legal Counsel
What is an audit inquiry letter to legal counsel?
An audit inquiry letter to legal counsel is a formal request for information from a company’s legal counsel as part of an audit. The letter typically requests information about the company’s legal proceedings, claims, and other matters that may have a material impact on the company’s financial statements.
When is an audit inquiry letter to legal counsel required?
An audit inquiry letter to legal counsel is typically required when the auditor has identified a potential risk of material misstatement in the financial statements due to legal matters. This may include situations where the company is involved in litigation, has received a regulatory inquiry, or has other legal issues that could impact its financial position.
What information is typically requested in an audit inquiry letter to legal counsel?
The information typically requested in an audit inquiry letter to legal counsel includes:
- A description of all pending or threatened legal proceedings, including the nature of the proceedings, the potential impact on the company’s financial statements, and the likelihood of an unfavorable outcome.
- A description of all claims or assessments against the company, including the nature of the claims, the potential impact on the company’s financial statements, and the likelihood of an unfavorable outcome.
- A description of any other legal matters that may have a material impact on the company’s financial statements.
How should an audit inquiry letter to legal counsel be prepared?
An audit inquiry letter to legal counsel should be prepared in a clear and concise manner. The letter should be tailored to the specific circumstances of the audit and should request only the information that is necessary to assess the risk of material misstatement.
What are the consequences of not responding to an audit inquiry letter to legal counsel?
If a company’s legal counsel does not respond to an audit inquiry letter, the auditor may be unable to obtain sufficient evidence to support the company’s financial statements. This may result in a qualified audit opinion or, in severe cases, a disclaimer of opinion.