When a CPA Reports on Audited Financial Statements Prepared on the Cash

question 559

Multiple Choice

When a CPA reports on audited financial statements prepared on the cash receipts and disbursements basis of accounting, the report should:

• A) Explain why this basis of accounting is more useful for the readers of this entity's financial statements than GAAP.
• B) Refer to the note in the financial statements that describes management's responsibility for the financial statements.
• C) State that the basis of presentation is a comprehensive basis of accounting (OCBOA) other than GAAP.
• D) Include a separate explanatory paragraph that discusses the justification for, and the CPA's concurrence with, the departure from GAAP.

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Definitions:

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