Question: In analyzing legal expense for the Boastman Bottle Company Mary

In analyzing legal expense for the Boastman Bottle Company, Mary Little, CPA, observes that the company has paid legal fees to three different law firms during the current year. In accordance with her CPA firm's normal operating practice, Little requests standard attorney letters as of the balance sheet date from each of the three law firms.
On the last day of field work, Little notes that one of the attorney letters has not yet been received. The second letter contains a statement to the effect that the law firm deals exclusively in registering patents and refuses to comment on any lawsuits or other legal affairs of the client. The third attorney's letter states that there is an outstanding unpaid bill due from the client and recognizes the existence of a potentially material lawsuit against the client but refuses to comment further to protect the legal rights of the client.

Required
a. Evaluate Little's approach to sending the attorney letters and her follow-up on the responses.
b. What should Little do about each of the letters?


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  • CreatedOctober 10, 2012
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