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ASA 508 Enquiry Regarding Litigation and Claims

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Main Features 
The purpose of this Auditing Standard is to establish mandatory requirements and provide explanatory guidance on obtaining sufficient appropriate audit evidence regarding legal matters affecting the entity. 
 
This Auditing Standard:

  1. requires the auditor to obtain sufficient appropriate audit evidence regarding the identification of legal matters;
    2.  
  2. requires the auditor to request management to obtain a representation letter from the entity’s lawyers as a means of acquiring sufficient appropriate audit evidence for the identification and existence of litigation by or against the entity; and
    3.  
  3. includes additional follow up procedures, which the auditor ordinarily pursues, when a lawyer’s response to a representation letter is either not received or the response is incomplete.
Operative Date 
This Auditing Standard is operative for financial reporting periods commencing on or after 1 July 2006. 
 
 
This excerpt is taken from ASA 508, which is available for download on the AUASB website