An Auditor's Special Report on Financial Statements Prepared in Conformity

question 105

Multiple Choice

An auditor's special report on financial statements prepared in conformity with the cash basis of accounting should include a separate explanatory paragraph before the opinion paragraph that:

• A) Justifies the reasons for departing from generally accepted accounting principles.
• B) States whether the financial statements are fairly presented in conformity with another comprehensive basis of accounting.
• C) Refers to the note to the financial statements that describes the basis of accounting.
• D) Explains how the results of operations differ from financial statements prepared in conformity with generally accepted accounting principles.

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Definitions:

Conflicts

Disagreements or clashes between individuals or groups due to differing interests, beliefs, or values.

Project Allegiance

The commitment or loyalty of an individual or team towards the successful completion of a specific project.

Corporate Allegiance

Loyalty and commitment of employees to their organization, often manifesting in higher productivity and morale.

Organizational Empowerment

Describes the process and practices that allow members within an organization to gain the authority, resources, and confidence to take initiative and make decisions to achieve organizational goals.