Preview Questions Legal Cost Auditor | Role Specific Skill

Question 1: How should a Legal Cost Auditor handle "complex billing scenarios," such as blended rates, contingent fees, or hybrid fee arrangements?

Which action should you take?

Choose only one option

Complex billing scenarios should be handled by the billing department, not the auditor

Complex billing scenarios should be ignored if the total fee seems reasonable

The auditor should carefully analyze the billing arrangement and verify that all charges are consistent with the contract terms and industry standards

Complex billing scenarios should be simplified to a single rate to avoid complications

Question 2: How should a Legal Cost Auditor address a situation where a client insists on receiving unauthorized fees?

Which action should you take?

Choose only one option

Report the client to the bar association for unethical behavior

Ignore the request as the client is responsible for their fees

Agree to the request if the client insists

Discuss the situation with the client and refuse the request

Question 3: How should a Legal Cost Auditor verify "client payment history" when conducting a legal cost audit?

Which action should you take?

Choose only one option

Client payment history should be reviewed once a year, not at every billing cycle

Client payment history should only be verified for high-value clients

Client payment history should be checked against invoiced amounts, including any adjustments, write-offs, or discounts provided

Client payment history should be ignored unless there is an outstanding balance

Question 4: Which of the following actions would be considered a conflict of interest for a Legal Cost Auditor?

Which action should you take?

Choose only one option

Accepting offers from the firm after the audit

Reviewing a file of a client from a previous audit

Working with a client who is also a family member

Providing advice on legal strategies to the firm

Question 5: When preparing a "financial summary report" for a legal audit, how should a Legal Cost Auditor ensure completeness?

Which action should you take?

Choose only one option

By including only the total billed amount and not detailing individual charges

By ensuring all billed items, including fees, disbursements, and adjustments, are accurately reflected and categorized according to the billing agreement

By including only the fees and excluding disbursements

By excluding adjustments to keep the report simple and concise

Question 6: In financial reporting, what is the role of "disbursements" in legal audits, and how should they be handled?

Which action should you take?

Choose only one option

Disbursements should be added without review, as they are part of the overall legal expenses

Disbursements can be disregarded if they are below a certain threshold

Disbursements should be reviewed to ensure they are accurately reflected in the final bill, in compliance with client agreements and legal regulations

Disbursements should only be included in the report if requested by the client