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Simple English definitions for legal terms
audit-letter response
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A quick definition of audit-letter response:
An audit-letter response is a letter that a lawyer writes to a client's financial auditors, usually at the client's request. The letter provides information about pending or threatened litigation. The American Bar Association has guidelines for these letters, which lawyers must follow. They are also called audit responses or audit-letter responses.
A more thorough explanation:
An audit-letter response is a letter that an attorney provides to a client's financial auditors, usually at the client's request. The letter contains information regarding matters such as pending or threatened litigation. The purpose of the letter is to help the auditors understand the legal risks associated with the client's financial statements.
For example, if a company is being sued for breach of contract, the company's attorney may provide an audit-letter response to the auditors. The response would explain the details of the lawsuit, the potential financial impact on the company, and any other relevant information that the auditors need to know.
Audit responses must comply with the American Bar Association's Statement of Policy Regarding Lawyer's Responses to Auditors' Requests for Information, which was published in December 1975. This policy ensures that the information provided in the response is accurate and complete.