special auditor's report covering compliance with contractual agreements, such as bond indentures and loan agreements, and regulatory requirements. The lender or agency wishes to obtain the auditor's assurance as to compliance with the terms of the agreement. The data need not be audited for compliance; however, if the financial statements have been audited, the auditor may provide negative assurance on compliance. The compliance report may be separately issued or addended to the auditor's report on the financial statements. In the latter case, usually an explanatory paragraph appears below the opinion paragraph. An example of a compliance audit is one conducted for the trustee of bondholders to determine whether provisions of the bond contract (such as the maintenance of required financial ratios) are being adhered to.
special auditor's report covering compliance with contractual agreements, such as bond indentures and loan agreements, and regulatory requirements. The lender or agency wishes to obtain the auditor's assurance as to compliance with the terms of the agreement. The data need not be audited for compliance; however, if the financial statements have been audited, the auditor may provide negative assurance on compliance.
