ASA 800 - The Auditor’s Report on Special Purpose Audit Engagements - April 2006
Reports on Compliance with Contractual AReports on Compliance with Contractual Agreements
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Reports on Compliance with Contractual Agreements
38 The auditor may be requested to report on an entity’s compliance with certain aspects of contractual agreements, such as bond indentures or loan agreements. Such agreements ordinarily require the entity to comply with a variety of covenants involving such matters as payments of interest, maintenance of predetermined financial ratios, restriction of dividend payments and the use of the proceeds of sales of property.
39 Engagements to express an opinion as to an entity’s compliance with contractual agreements shall be undertaken only when the overall aspects of compliance relate to accounting and financial matters within the scope of the auditor’s professional competence.
40 When there are particular matters forming part of the engagement that are outside the auditor’s expertise, under ASA 620 Using the Work of an Expert, the auditor needs to consider using the work of an expert.
41 The report shall state whether, in the auditor’s opinion, the entity has complied with the particular provisions of the agreement.
42 Appendix 1 to this Auditing Standard gives an example of an auditor’s report on compliance given in a separate report.