Audit Inquiry Letters and Discovery: Protection Based on Compulsion

Authors

Melissa D. Shalit, Benjamin N. Cardozo School of Law

Abstract

The Securities and Exchange Commission ("SEC") requires a public corporation to file quarterly and annual statements which describe the corporation's financial status. In order to comply with this requirement, the corporation hires an independent auditor to prepare accurate financial statements. The auditor must account for any event that may affect the client's financial status, including pending litigation. Therefore, in an "audit inquiry letter," the auditor requests the client-corporation to inform him of any outstanding claims and any pending or potential litigation. In this way, the auditor can include an accurate representation of his client's financial status in his report.

Disciplines

Law | Legal Ethics and Professional Responsibility | Legal Profession | Taxation-Federal

Recommended Citation

Melissa D. Shalit, Audit Inquiry Letters and Discovery: Protection Based on Compulsion, 15 Cardozo L. Rev. 1263 (1994).
Available at: https://larc.cardozo.yu.edu/clr/vol15/iss4/14