Yue is auditing the accounts receivable for Slawson & Slawson, LLP, a large law partnership. The managing partner of the law firm has prohibited the auditor from confirming any of the law firm’s accounts receivable. The lawyers are concerned that their clients would consider it a breach of confidentiality for the auditor to know they had engaged the lawyer’s services and would not understand that the auditor is also operating under strict professional rules that require confidentiality. The accounts receivable balance is highly material. Yue is not able to satisfy himself as to the receivable balance by alternative means.
a. Describe the type and format of audit report that should be issued in this case.
b. Explain the type of evidence that Yue was trying to obtain by confirming the law firm’s account receivable balances, and the assertion(s) and the specific audit objectives that this evidence relates to.
c. Why do you think it was not possible to obtain this evidence by alternative means?