Preview Questions Legal Cost Auditor | Role Specific Skill

Question 1: What is the most effective way for a Legal Cost Auditor to determine the accuracy of a law firm's write-offs and adjustments?

Which action should you take?

Choose only one option

Focus only on the write-offs that appear to be unusually high

Accept the adjustments as part of routine billing without verification

Assume write-offs are standard practice and do not require verification

Review each write-off against the case file and client agreement, and verify with the billing department

Question 2: How does "complexity of work" impact a legal cost audit, and what should a legal cost auditor consider when reviewing complex legal work?

Which action should you take?

Choose only one option

Complexity of work is irrelevant as long as the tasks are performed

The auditor should assess if the time spent is reasonable for the complexity of the task and if the rates are justified for specialized work

Complexity of work should not affect billing as long as the total hours are accurate

Complexity of work should only be considered when reviewing large corporate cases

Question 3: How should a Legal Cost Auditor handle "duplicate time entries" found during a time entry audit?

Which action should you take?

Choose only one option

Duplicate time entries should be identified and removed, with the correct entry retained and properly documented

Duplicate time entries should be ignored if they are minor

Duplicate time entries should be kept for reference purposes, even if they are redundant

Duplicate time entries should be merged into one entry without reviewing the details

Question 4: What is the significance of "uniformity in billing rates" and how should it be enforced during an audit?

Which action should you take?

Choose only one option

Uniformity in billing rates is irrelevant as long as the client agrees to the total amount

Billing rates should be adjusted for each client based on the matter's complexity

Billing rates should be treated as a guideline rather than a strict rule

Uniform billing rates should be applied consistently across all clients as per agreed-upon terms; discrepancies should be flagged

Question 5: What should a Legal Cost Auditor do if they identify "non-billable activities" that have been incorrectly included in an invoice?

Which action should you take?

Choose only one option

Adjust the time entries to classify them as billable hours

The auditor should flag these activities and recommend that they be removed from the final invoice

Ignore the non-billable activities if the client hasn't complained about them

Let the attorney determine whether non-billable activities should be excluded

Question 6: Which financial statement is most relevant for assessing the cost recoverability in legal services?

Which action should you take?

Choose only one option

Balance Sheet

Profit and Loss Statement

Statement of Cash Flows

Retained Earnings Statement