Alert to restrict report

Question 1

What is the auditor’s responsibility to enforce the distribution of the auditor’s written communication having an alert to restrict the use of it?

Answer 1

The auditor is not responsible for enforcing such distribution. The purpose of the alert is to communicate appropriately the restricted distribution.

Question 2

Give an example of the language typically used to restrict the distribution of the auditor’s report or other written communication.

Answer 2

“This (report, letter, presentation, or communication) is intended solely for the information and use of (list or refer to the specified parties) and is not intended to be and should not be used by anyone other than these specified parties.”

Question 3

Identify two general circumstances that would require an alert to restrict the use of the auditor’s report.

Answer 3

1. )When the subject matter is based on criteria that are only suitable for (or available to) a limited number of users
2. )The matters are presented in a by-product report that is not the primary objective of the engagement.

Question 4

What is the purpose of an alert to restrict the use of the auditor’s written communication?

Answer 4

The purpose is to restrict the use of the auditor’s written communication due to potential for misunderstanding if taken out of the context for which the written communication is intended.