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.

Question

Quizplus · Accepted Answer

The auditor's report should clearly indicate that the financial statements are prepared on a special purpose framework, such as the income tax basis, to avoid confusion with GAAP statements.

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