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:

Business Analysis

The process of analyzing a new product to determine its profitability.

SWOT Analysis

A tool for strategic planning that helps determine the Strengths, Weaknesses, Opportunities, and Threats connected to competing in business or planning projects.

Environmental Scanning

The act of monitoring developments outside the firm’s control with the goal of detecting and responding to threats and opportunities.

SWOT Analysis

A strategic planning tool used to identify Strengths, Weaknesses, Opportunities, and Threats related to business competition or project planning.