Academic journal article Journal of Accountancy

Unified Guidance for Restricted-Use Reports

Academic journal article Journal of Accountancy

Unified Guidance for Restricted-Use Reports

Article excerpt

Does an engagement require a restricted-use report? If so, what elements should the CPA include in the report? New SAS no. 87, Restricting the Use of an Auditor's Report, helps answer these questions. Although previous auditing standards for engagements requiring restricted-use reports contain guidance applicable to specific types of engagements, this statement unifies the guidance for restricted-use reports. The ASB added to the statement a list of illustrative auditors' reports in SASs and AICPA audit and accounting guides that will require conforming changes as a result of the new standard's guidance.

Restricted-use reports are intended only for specified parties. SAS no. 87 allows auditors to restrict the use of any report, even one that ordinarily is a general use report. It says auditors should restrict the use of a report when

* The subject matter of the auditor's report or the presentation being reported on is based either on measurement or disclosure criteria contained in contractual agreements or on regulatory provisions that do not conform with GAAP or another comprehensive basis of accounting.

* The accountant's report is based on procedures that are especially designed and performed to satisfy the needs of specified parties who accept responsibility for the sufficiency of the procedures.

* The auditor's report is issued as a by-product of a financial statement audit and is based on the results of procedures designed to enable the auditor to express an opinion on the financial statements taken as a who]e, not to provide assurance on the specific subject matter of the report.

In each instance, the SAS presents the rationale for restricting the use of the report.

Additional help

SAS no. 87 also provides guidance on adding other parties as specified parties in an engagement resulting in a restricted-use report. …

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