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Reporting on compliance

AUD Chapter 30 · Area IV · Blueprint IV.D

Lenders and regulators often want to know one thing: did the entity keep its promises? The Blueprint covers two ways a CPA reports on that. One is a by-product of the financial statement audit, about loan covenants and regulatory requirements. The other is a separate attestation engagement on compliance. Both are tested at the remembering level, and the wording differences decide most questions.

In this chapter

1. Two routes to a compliance report
2. Compliance reports in connection with an audit
3. Form and content of the audit-related compliance report
4. Checking a covenant: the arithmetic
5. Compliance attestation engagements
6. The compliance examination report

This chapter has 6 lessons, 50 practice MCQs with explanations and 10 simulations, plus flashcards and a recall sheet.

What this chapter covers

• Compliance with contracts or regulations in connection with an audit
• compliance attestation
• internal control over compliance

Chapter 29: Preparation, compilation and review engagements · Chapter 31: Other reporting considerations