During the audit of the Merrill Manufacturing Company,Ralph Pyson, CPA, has become aware of four lawsuits against the client throughdiscussions with the client, reading corporate minutes, and reviewing correspondencefiles. How should Pyson determine the materiality of the lawsuits and the properdisclosure in the financial statements?

During the audit of the Merrill Manufacturing Company,Ralph Pyson, CPA, has become aware of four lawsuits against the client throughdiscussions with the client, reading corporate minutes, and reviewing correspondencefiles. How should Pyson determine the materiality of the lawsuits and the properdisclosure in the financial statements?

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter4: Professional Legal Liability

Section: Chapter Questions

Problem 18RQSC

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