Special Purpose Reports

Question 1

are financial reports, such as offering statements, budgets, and reports filed with federal grantor agencies or senior levels of government, issued to satisfy the specific needs of specific users.

Answer 1

Special-Purpose Financial Statements

Question 2

When are Special-Purpose Financial Statements used?

Answer 2

• To meet specific legal or contractual requirements
• To present financial statements using a basis of accounting that differs from GAAP
• To present financial information in prescribed formats
• To report on specified elements, accounts, or items taken from the general purpose financial statements

Question 3

What are the 5 Special Purpose Frameworks?

Answer 3

1. Cash Basis
2. Tax Basis
3. Regulatory Basis
4. Any other basis w/ definite criteria
5. Contractual Basis

1-4 - OCBOA (Other Comprehensive Basis of Accounting)

Question 4

How is the framework identified in the introductory paragraph for a report on a Special Purpose Framework?

Answer 4

• Statement of Assets & Liabilities Arising from Cash Transactions
• Can’t use terms associated w/ GAAP

Question 5

How is the Auditor’s Responsibility Paragraph affected when issuing a report on a Special Purpose Framework

Answer 5

The AR Paragraph is UNCHANGED

Question 6

When issuing a report on a Special Purpose Framework, it is required to include….

Answer 6

An EOM Paragraph. And it must:

• refer to Note which describes the Special Purpose Framework
• state framework is other than US GAAP (i.e., OCBOA)

Question 7

When does a report on a Special Purpose Framework REQUIRE an Other-Matter paragraph and what is the purpose?

Answer 7

1. If the framework is regulatory basis
2. If the framework is contractual basis
   - The purpose of the OM paragraph is to RESTRICT use

Question 8

What is the opinion issued for an audit of a Special Purpose Framework if there is an OCBOA or Disclosure problem?
If material, _________
If pervasive, __________

Answer 8

If material - “Except for” QUALIFIED Opinion

If pervasive - ADVERSE Opinion

Question 9

What is the opinion issued for an audit of a Special Purpose Framework if there is a scope problem during the audit?
If material, _________
If pervasive, __________

Answer 9

If material - “Except for” QUALIFIED Opinion

If pervasive - DISCLAIM Opinion

Question 10

What is the opinion issued for an audit of a Special Purpose Framework if there is a going-concern problem discovered?
If material, _________
If pervasive, __________

Answer 10

If material - UNMODIFIED Opinion (REQUIRED EOM paragraph)

If pervasive - DISCLAIM Opinion

Question 11

What is the opinion issued for an audit of a Special Purpose Framework if there is an uncertainty that causes material misstatement?
If material, _________
If pervasive, __________

Answer 11

If material - “Except for” QUALIFIED Opinion

If pervasive - ADVERSE Opinion

Question 12

What is the opinion issued for an audit of a Special Purpose Framework if there is an uncertainty due to the fact that the auditor is unable to obtain sufficient evidence?
If material, _________
If pervasive, __________

Answer 12

If material - “Except for” QUALIFIED Opinion

If pervasive - DISCLAIM Opinion