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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Reporting on other assignments

Pellam & Co has completed agreed-upon procedures for Norvik Ltd and the engagement letter, signed by the bank that requested the work, says the report is for the bank's use only. A supplier now asks for a copy to support a credit decision. What is the most appropriate position for Pellam & Co under ISRS 4400 (Revised)?

Pellam should not allow the supplier to rely on the report without agreement. The report states its purpose and restricts use to the engaging party and specified users, because the procedures were designed for that purpose. Having no assurance does not make it suitable for general distribution.

  1. AThe report should state the purpose of the procedures and restrict its use to the engaging party and specified parties, so Pellam should not allow the supplier to rely on it without agreementCorrect
  2. BThe report may be freely distributed because it contains only facts and no assurance
  3. CPellam must convert the engagement into a review before the supplier can use the report
  4. DPellam should add an opinion so that the supplier can rely on the findings

Explanation

ISRS 4400 (Revised) requires the report to describe the purpose of the engagement and identify the intended users and any restriction on use, because the procedures were designed for a specific purpose. The absence of assurance does not make the report suitable for any user. Adding an opinion or converting to a review would change the engagement and is not required.

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