What modifications must be made to the standard auditor's report for these situations?
Identify the special purpose framework used in each of the following situations.
1. A real estate company reports to its partners on the basis used to complete the income tax return.
2. A company has its financial statements prepared on a price-level adjusted basis as required by its lender.
3. An insurance company reports in compliance with the rules of a state insurance commission.
4. A partnership reports on revenues received and expenses paid.
1. Tax basis;
2. Contractual basis;
3. Regulatory basis;
4. Cash basis.
The financial statements listed in the introductory paragraph must be titled so they are not confused with financial statements prepared on a GAAP basis. Also, the basis used to prepare the financial statements should be stated, as well as a reference to the note in the financial statements that describes the basis in more detail. In some situations (regulatory basis), a paragraph restricting the use of the financial statements must also be included.
You might also like to view...
Requests for recommendations are generally organized using what approach?
A) Question and answer B) Direct C) Indirect D) Persuasive E) Free form
A board of directors hired a consultant to evaluate their nonprofit organization’s legal compliance. According to Paton’s dashboard, the nonprofit is assessing the organization’s ______.
A. risks B. assets C. capabilities D. underlying performance
________ injury occurs when a seller cuts prices in one geographic area in order to drive out a local competitor
A) Secondary-line B) Primary-line C) Collateral-line D) Tertiary-line
The percentage of business plans accepted by venture capitalists for investment purposes is very high.
Answer the following statement true (T) or false (F)