diff --git a/flang/lib/Semantics/check-declarations.cpp b/flang/lib/Semantics/check-declarations.cpp
--- a/flang/lib/Semantics/check-declarations.cpp
+++ b/flang/lib/Semantics/check-declarations.cpp
@@ -824,13 +824,6 @@
           "An initialized variable in BLOCK DATA must be in a COMMON block"_err_en_US);
     }
   }
-  if (type && type->IsPolymorphic() &&
-      !(type->IsAssumedType() || IsAllocatableOrPointer(symbol) ||
-          IsDummy(symbol))) { // C708
-    messages_.Say("CLASS entity '%s' must be a dummy argument or have "
-                  "ALLOCATABLE or POINTER attribute"_err_en_US,
-        symbol.name());
-  }
   if (derived && InPure() && !InInterface() &&
       IsAutomaticallyDestroyed(symbol) &&
       !IsIntentOut(symbol) /*has better messages*/ &&
@@ -3093,15 +3086,22 @@
 }
 
 void CheckHelper::CheckSymbolType(const Symbol &symbol) {
-  if (!IsAllocatable(symbol) &&
-      (!IsPointer(symbol) ||
-          (IsProcedure(symbol) && !symbol.HasExplicitInterface()))) { // C702
-    if (auto dyType{evaluate::DynamicType::From(symbol)}) {
-      if (dyType->HasDeferredTypeParameter()) {
-        messages_.Say(
-            "'%s' has a type %s with a deferred type parameter but is neither an allocatable nor an object pointer"_err_en_US,
-            symbol.name(), dyType->AsFortran());
-      }
+  const Symbol *result{FindFunctionResult(symbol)};
+  const Symbol &relevant{result ? *result : symbol};
+  if (IsAllocatable(relevant)) { // always ok
+  } else if (IsPointer(relevant) && !IsProcedure(relevant)) {
+    // object pointers are always ok
+  } else if (auto dyType{evaluate::DynamicType::From(relevant)}) {
+    if (dyType->IsPolymorphic() && !dyType->IsAssumedType() &&
+        !(IsDummy(symbol) && !IsProcedure(relevant))) { // C708
+      messages_.Say(
+          "CLASS entity '%s' must be a dummy argument, allocatable, or object pointer"_err_en_US,
+          symbol.name());
+    }
+    if (dyType->HasDeferredTypeParameter()) { // C702
+      messages_.Say(
+          "'%s' has a type %s with a deferred type parameter but is neither an allocatable nor an object pointer"_err_en_US,
+          symbol.name(), dyType->AsFortran());
     }
   }
 }
diff --git a/flang/test/Semantics/declarations06.f90 b/flang/test/Semantics/declarations06.f90
new file mode 100644
--- /dev/null
+++ b/flang/test/Semantics/declarations06.f90
@@ -0,0 +1,36 @@
+! RUN: %python %S/test_errors.py %s %flang_fc1
+! A CLASS() entity must be a dummy argument, allocatable,
+! or object pointer.  Don't get confused with procedure pointers.
+module m
+  type t
+  end type
+  !ERROR: CLASS entity 'v1' must be a dummy argument, allocatable, or object pointer
+  class(t) v1
+  class(t), allocatable :: v2 ! ok
+  class(t), pointer :: v3 ! ok
+  !ERROR: CLASS entity 'p1' must be a dummy argument, allocatable, or object pointer
+  procedure(cf1) :: p1
+  procedure(cf2) :: p2
+  procedure(cf3) :: p3
+  !ERROR: CLASS entity 'pp1' must be a dummy argument, allocatable, or object pointer
+  procedure(cf1), pointer :: pp1
+  procedure(cf2), pointer :: pp2
+  procedure(cf3), pointer :: pp3
+ contains
+  !ERROR: CLASS entity 'cf1' must be a dummy argument, allocatable, or object pointer
+  class(t) function cf1()
+  end
+  class(t) function cf2()
+    allocatable cf2 ! ok
+  end
+  class(t) function cf3()
+    pointer cf3 ! ok
+  end
+  subroutine test(d1,d2,d3)
+    class(t) d1 ! ok
+    !ERROR: CLASS entity 'd2' must be a dummy argument, allocatable, or object pointer
+    class(t), external :: d2
+    !ERROR: CLASS entity 'd3' must be a dummy argument, allocatable, or object pointer
+    class(t), external, pointer :: d3
+  end
+end
diff --git a/flang/test/Semantics/resolve44.f90 b/flang/test/Semantics/resolve44.f90
--- a/flang/test/Semantics/resolve44.f90
+++ b/flang/test/Semantics/resolve44.f90
@@ -11,7 +11,7 @@
     type(recursive1), pointer :: ok1
     type(recursive1), allocatable :: ok2
     !ERROR: Recursive use of the derived type requires POINTER or ALLOCATABLE
-    !ERROR: CLASS entity 'bad2' must be a dummy argument or have ALLOCATABLE or POINTER attribute
+    !ERROR: CLASS entity 'bad2' must be a dummy argument, allocatable, or object pointer
     class(recursive1) :: bad2
     class(recursive1), pointer :: ok3
     class(recursive1), allocatable :: ok4
@@ -24,7 +24,7 @@
     type(recursive2(kind,len)), pointer :: ok1
     type(recursive2(kind,len)), allocatable :: ok2
     !ERROR: Recursive use of the derived type requires POINTER or ALLOCATABLE
-    !ERROR: CLASS entity 'bad2' must be a dummy argument or have ALLOCATABLE or POINTER attribute
+    !ERROR: CLASS entity 'bad2' must be a dummy argument, allocatable, or object pointer
     class(recursive2(kind,len)) :: bad2
     class(recursive2(kind,len)), pointer :: ok3
     class(recursive2(kind,len)), allocatable :: ok4
@@ -37,7 +37,7 @@
     type(recursive3), pointer :: ok1
     type(recursive3), allocatable :: ok2
     !ERROR: Recursive use of the derived type requires POINTER or ALLOCATABLE
-    !ERROR: CLASS entity 'bad2' must be a dummy argument or have ALLOCATABLE or POINTER attribute
+    !ERROR: CLASS entity 'bad2' must be a dummy argument, allocatable, or object pointer
     class(recursive3) :: bad2
     class(recursive3), pointer :: ok3
     class(recursive3), allocatable :: ok4
diff --git a/flang/test/Semantics/resolve71.f90 b/flang/test/Semantics/resolve71.f90
--- a/flang/test/Semantics/resolve71.f90
+++ b/flang/test/Semantics/resolve71.f90
@@ -9,9 +9,9 @@
   class(parentType), allocatable :: avar
   class(*), allocatable :: starAllocatableVar
   class(*), pointer :: starPointerVar
-  !ERROR: CLASS entity 'barevar' must be a dummy argument or have ALLOCATABLE or POINTER attribute
+  !ERROR: CLASS entity 'barevar' must be a dummy argument, allocatable, or object pointer
   class(parentType) :: bareVar
-  !ERROR: CLASS entity 'starvar' must be a dummy argument or have ALLOCATABLE or POINTER attribute
+  !ERROR: CLASS entity 'starvar' must be a dummy argument, allocatable, or object pointer
   class(*) :: starVar
 
     contains