Craig Marks, CPA performs an audit of Treasure, Inc., which keeps its financial statements on the tax basis of accounting. Craig is aware of this fact and audits the financial statements on the criteria of the tax basis. What type of engagement is this?

Question

Quizplus · Accepted Answer

The engagement described is an audit that is being performed on the tax basis of accounting. While this is not a commonly used method for financial reporting, it is still a valid basis of accounting and can be audited using generally accepted auditing standards. The audit will result in the issuance of a special report that is based on the tax basis criteria.

Craig Marks, CPA Performs an Audit of Treasure, Inc