An auditor is preparing a report on a nonissuer's compliance with a contractual agreement related to a bank loan (e.g., debt covenants). The auditor has audited the financial statements and issued an unmodified opinion. Which of the following is a requirement for the compliance report?

Answer options:

The report must be distributed to the general public along with the financial statements.

The report must be restricted to the use of the audit committee, management, and the bank.

The auditor must express a positive opinion on compliance.

The report can only be issued if the auditor identified noncompliance.

How to approach this question

Compliance with contracts = Restricted Use (only for the bank and the company).

B.The report must be restricted to the use of the audit committee, management, and the bank.✓ Correct

The report must be restricted to the use of the audit committee, management, and the bank.

AU-C 806 requires that reports on compliance with aspects of contractual agreements be restricted to the use of the specified parties.

Forgetting the restricted use requirement.

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