Flashcards in Deck 1 Deck (20):
What report is needed when an uncertainty that cannot be reasonably estimated is adequately disclosed?
Unmodified opinion with no emphasis-of-matter paragraph
Information that is presented in the same document containing the audited financial statements that is voluntarily presented
Basic financial statements
Financial statements presented in accordance with an applicable financial reporting framework, such as GAAP
Required supplementary information
Information that is required by the SEC to accompany a entity's basic financial statements
What report/opinion is needed when substantial doubt about entity's ability to continue as a going concern is properly disclosed?
Generally add emphasis-of-matter paragraph but may also disclaim opinion based on judgement
events that occur after the balance sheet date but before the financial statements are issued
What is included in an emphasis-of-matter paragraph
- Quarterly financial data required by SEC is omitted
- Material change in accounting principle
Disclaimer of opinion is needed when?
Scope limitation or independence problem
Issued in connection with a limited review of interim financial information of a publicly held company
The auditor's report on summary financial statements derived from audited statements should include:
1. the CPA audited and expressed an opinion on the complete financial statements
2. Date of the auditor's report
3. Type of opinions expressed
4. whether the information is consistent, in all material respects.
Other comprehensive basis of accounting (cash, tax, and regulatory bases of accounting)
What title is suitable for financial statements that are prepared on a cash basis?
Statement of revenues collected and expenses paid
Special purpose framework
financial basis of accounting other than GAAP that includes cash basis, tax basis, regulatory basis, and contractual basis
What should the title of the OCBOA report be?
Independent auditor's report
Special consideration reports
- Special purpose framework (cash or tax basis)
- Single financial statements and specific elements
- Reporting on compliance
- Summary financial statements
Cash basis framework
Basis of accounting used to record cash receipts and disbursements
Special purpose framework (emphasis-of-matter)
Alerts readers about the preparation in accordance with a special purpose framework
Special purpose framework (other-matter)
Restricting the use of the auditor's report