A report on a nonissuer's internal control should include a statement limiting the use of the report when:

Question

Quizplus · Accepted Answer

Choice "C" is correct. When management's assertion is presented based on criteria that are only appropriate for or available to specific parties, the report should contain a statement limiting its use. Examples include reports based on criteria specified by a regulatory agency and reports based on criteria agreed to by management and some other specified party. Choice "A" is incorrect. There is no requirement to limit the use of the report when management's assertion accompanies the CPA's report. Choice "B" is incorrect. When management's assertion is presented as a representation letter to the CPA, the report should include a statement of management's assertion, but there is no requirement to limit the use of the report. Choice "D" is incorrect. Management is required to present its written assertion about the effectiveness of the entity's internal control as a condition of engagement performance.

A Report on a Nonissuer's Internal Control Should Include a Statement