A2 - Other Reports, Engagements, and Accounting Services

Question 1

When a CPA reports on audited financial statements prepared on the cash receipts and disbursements basis of accounting, the report should:

Answer 1

State that the basis of presentation is a comprehensive basis of accounting (OCBOA) other than GAAP

Question 2

An entity prepares its financial statements on its income tax basis. A description of how that basis differs from GAAP should be included in the:

Answer 2

Notes to the financial statements.