Part 1:
a-Search the EDGAR database to find a 10-K that reports a contingent liability. Write a paragraph summarizing one of the liabilities found in the financial statements. Did the company disclose the liability in the footnotes only, or did it recognize the liability in the financial statements?

b-What procedures might the auditors use to search for the contingent liabilities listed in part (a)? Explain the steps in the procedure in detail, as well as how they would provide the outcome desired.

Part 2:
Visit the American Institute of Certified Public Accountants (AICPA) Web site at www.aicpa.org and search for recent AICPA Disciplinary Actions against auditors who did not exercise due professional care and skepticism in performing the audits.

Write a brief summary of one case, describing the auditing standards violated.
Discuss whether you agree or not with the AICPA Disciplinary Actions in each case and whether you think the actions were sufficient and fair.