When an Auditor Reports on Financial Statements Prepared on an Entity's

question 163

Multiple Choice

When an auditor reports on financial statements prepared on an entity's income tax basis, the auditor's report should:

• A) Disclaim an opinion on whether the statements were examined in accordance with generally accepted auditing standards.
• B) Not express an opinion on whether the statements are presented in conformity with the comprehensive basis of accounting used.
• C) Include an Explanation: of how the results of operations differ from the cash receipts and disbursements basis of accounting. Include an Explanation: of how the results of operations differ from the cash receipts and disbursements basis of accounting.
• D) State that the basis of presentation is a comprehensive basis of accounting other than GAAP.

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Definitions:

Leadership Substitutes Theory

A concept suggesting that certain characteristics of the organization, task, or subordinates themselves can diminish or replace the need for leadership.

Situational Leadership Theory

A leadership model that proposes the effectiveness of leadership styles varies depending on the readiness and competence of the followers.

Leadership Emergence

The process by which an individual becomes recognized by others within a group as possessing leadership qualities and takes on leadership roles.

Directive Leaders

Leaders who take charge by giving specific instructions and orders, focusing on task accomplishment and maintaining clear objectives for their team.