There Are Four Conditions That Must Be Met Before an Auditor

question 54

Essay

There are four conditions that must be met before an auditor can issue a standard unqualified report for the audit of a private company. Please discuss each of these four conditions.

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Definitions:

IFRS

International Financial Reporting Standards, a set of international accounting standards stating how particular types of transactions and other events should be reported in financial statements.

GAAP

Generally Accepted Accounting Principles, a set of rules and standards designed to improve the clarity, consistency, and comparability of financial reporting across industries in the United States.

Deferred Income Taxes

Taxes owed for the current period but not yet required to be paid, due to differences between financial accounting and tax reporting.

Temporary Difference

Differences between accounting income and taxable income that are expected to reverse in the future, affecting deferred tax calculations.