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

question 23

Multiple Choice

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

• A) Be titled so that the financial statements are not confused with statements prepared to conform to generally accepted accounting principles.
• B) Disclaim an opinion on whether the statements were examined in accordance with generally accepted auditing standards.
• C) Not express an opinion on whether the statements are presented in conformity with the basis of accounting used.
• D) Include an explanation of how the results of operations differ from the cash receipts and disbursements basis of accounting.

---

Definitions:

Lawsuit

A legal action brought in a court of law by one party against another for the enforcement or protection of a right, or the redress or prevention of a wrong.

Entitlement to Share

Entitlement to share typically refers to the right of an individual or entity to receive a portion of proceeds, profits, or assets, particularly in contexts such as inheritance, divorces, or corporate liquidations.

Limited Partner

An investor in a limited partnership, who is not involved in day-to-day management and whose liability is limited to the amount of the investment.

Responsibility to Share

The obligation of individuals or entities to distribute information, resources, or responsibilities among others.