Question

An accountant has been engaged to report on an entity's internal controls without performing an audit of the financial statements. What restrictions, if any, should the accountant place on the use of this report?

a. This report should be restricted for use by management.
b. This report should be restricted for use by the audit committee.
c. This report should be restricted for use by a specified regulatory agency.
d. The accountant does not need to place any restrictions on the use of this report.

Answer 1

An accountant engaged to report on an entity's internal controls without performing an audit of the financial statements should restrict the use of the report for the audit committee.

Step-by-step explanation:

An accountant engaged to report on an entity's internal controls without performing an audit of the financial statements may need to place restrictions on the use of the report. In this case, the accountant should restrict the use of the report for

1. option b. This report should be restricted for use by the audit committee because the audit committee is responsible for overseeing the organization's financial reporting and internal controls.